I still don't see why we should take your word (or the professor's) word on it.

Just stirring the pot here, but why should we take YOUR word that your ideas would work sbyvl? You seem awfully confident in them, and yet, no real support. We're just supposed to believe that you understand the massively complex world economy so completely that you know what will and won't work? Interesting...

Ah, so you're seeking refuge here now with your crazy idea's, sbyvl...

I suppose the traditionalist catholics didn't like you either?

Well, these guys have brains, so you're wasting your time.

@Drano: Because they have worked before. I am advocating the exact same policies that were in place prior to the Progressive Era. They worked splendidly back then, and they can work again if we allow them to.

@steephie: Which crazy ideas?
They like me just fine, thank you.
Some of them do, anyway...

They did not work splendidly, hundreds of thousands of people suffered because of the greed of the extremely rich, it was a horrible time to be an average American (though, granted, conditions were much worse in some other countries).

Sigh. I think government leaders' greed for power is a bigger problem. Conditions were wonderful. It was the greatest time for innovation in American History. There was No Income tax, No Corporate tax, etc. People had more money, prices were lower, there was less inflation. It was a wonderful time to be alive.

"When the interests of the many are concerned, the interests of the few must yield."
- FDR

FDR and Obama aren't socialists for investing in America and trying to rebuild our economy and improve the quality of life for citizens. Government isn't a four-letter word. Washington, Jefferson, Lincoln, TR, Eisenhower, Kennedy... all used government to improve life, liberty, and the pursuit of happiness. And none of that altered our democratic and capitalistic roots. Government exists to serve the people and should be used to help solve the problems we can't solve on our own, e.g., threats from foreign powers and keeping the world safe from the forces of overwhelming tyranny, keeping airplanes safe, providing disaster relief, regulating automobile traffic, insuring equal rights and opportunities, developing new industry...

1. Those technologies are inefficient and a waste of money. Just ask Solyndra.

The funds represented by investments that have failed in the Department of Energy's clean energy portfolio represent less than five percent of the total portfolio. This is a record the private sector would consider remarkable but is particularly impressive for a portfolio of technologically innovative projects being built at a commercial scale for the first time anywhere. Solyndra is one company that went belly-up.

The government has a long and successful history in helping with technological innovation in helping America’s entrepreneurs succeed in new high-risk, high-reward sectors. Government has played a key role as both an early investor or as a customer in the development of virtually every advanced technology we take for granted today, from aviation to biotechnology, to computers and the Internet, microchips, and now clean energy. Indeed, without a visionary government investing in key strategic industries, world-leading companies like Google, Genentech and Boeing would not exist.

2. That is not the federal government's job. Read Article I Section VIII of the Constitution.

The government's job is to serve the people and make America work better. At one time, slavery was protected by the Constitution. We amend the Constitution to best serve the needs of all our citizens; reasonable people don't stand stubbornly behind it and make it an obstacle to a better society. And this is nothing radical, in fact it has been done by many presidents. Lincoln certainly thought it was the Federal Government's job to do these kinds of things, granting federal support to build the transcontinental railroad and founding the Academy of Sciences.

3. Just get rid of all taxes. It will save you the energy.

How will we fund the police, fire, and emergency services; build roads; educate children, keep the army, air force, navy, and FBI strong; regulate air traffic; insure our water and food are safe; our buildings are sound; our banks don't gamble away the public's savings and so on? Tariffs will only bring in a fraction of what we need, and that's if other countries don't rebel against them, and they don't account for the fact that our economy can not continue to endlessly expand into new frontiers or acquire endless resources.

4. That is Unconstitutional. Read Article I Section VIII of the Constitution.

We can certainly reverse Citizens United and regulate donations, transparency, and broadcast licensing requirements. And since politics has been corrupted by money and big business, it's in the best interests of the people to amend the Constitution to take money out of elections and insure our elected officials are loyal to our needs and not to their future lobbying job's needs (Congress has an approval rating of what, 8%?). We've amended the Constitution to bust monopolies and change term limits when it served the interests of the people before. This is nothing radical or new.

5. That is Unconstitutional. Read Article I Section VIII of the Constitution. And besides, nobody wants it. Obamacare is ridiculously unpopular. If you want something like that, go to Taxachusetts.

Except for the people that were denied coverage because they were really sick and needed to actually use their health care coverage, or the people that had to use their coverage and found out it only covered a sliver of what was due and that they would be in debt for years, or the people who were denied coverage or gouged because they had pre-existing conditions, or the people who couldn't afford the steeply rising premiums (120% over the first decade of this century), or the retirees and poor who couldn't afford coverage or adequate coverage at all...

And if we don't do anything about rising health care cost and deteriorating health care quality, people will be even unhappier and it will be the #1 burden on our economy. This is exactly the kind of thing government is there to help with, just ask the 36 countries that get better health care than us, have a longer life expectancy than us, and pay less than half what we do.

Oh, and most people want to improve the Affordable Care Act, not repeal it. Adding a public option and taking out huge subsidies to health insurers that Republicans demanded when Democrats made over 150 compromises with them to create the law would be a great start.

It's still an atrocious waste of money. We could eliminate the budget deficit just by repealing this and the other money pits enacted by Obama.

1. Solyndra is an example of a futile attempt by a futile department to clean up the atmosphere. And by the way, you know what the largest greenhouse gas is? Water vapor. What do you plan to do about that?
2. No it's not. Read the Constitution.
3. Tariffs.
4. In a capitalist society, people can spend their money as they wish.
5. Charities and local governments can help those people. The Federal government should not get involved.

I can't believe you sbyvl, you want us to ACTUALLY GO BACK IN TIME. We have made so much progress in technology, economics, politics, and numerous other fields, and you are saying we should just ignore all of the advances of the past century and go back to the good ol' days where slaves were still around, there were no labor unions, and the US wasn't yet the largest economy in the world. Your "reasoning" boggles my mind...

Also, no matter what you think about FDR, you have to admit his government spending stimulated the economy greatly. Any liberal should say the same thing about Reagan. They might not like him as a president, but the economy was too good during his presidency to ignore.

Also, even if you say FDR's spending did nothing, at least the government was doing something to help the american people out of the depression. They created jobs and gave the people something tangible that they could say "the government is doing something to help us". Laissez-faire capitalism doesn't work that way. If the economy is doing poorly, the government can literally do nothing to help the people. That is one of the many problems with laissez-faire capitalism.

I can't admit something that isn't true.

It is fact that during his presidency the economy climbed back out of the hole that tariffs and laissez-faire policies caused.

Wrong. http://upload.wikimedia.org/wikipedia/commons/5/58/US_Unemployment_1910-1960.gif

Unemployment was above 15% until World War II

Oh, and by the way, the uptick around 1920 was the Recession at the end of the Wilson Administration, caused undoubtedly by his reckless policies. But I'm sure that's Capitalism's fault too. That would explain why Harding, by cutting taxes dramatically and slashing spending, brought the recession to an end in four months.

It's still an atrocious waste of money. We could eliminate the budget deficit just by repealing this and the other money pits enacted by Obama."

Deficits were projected through the 2020s back in 2008, before Obama even took office. When Obama was sworn in, we had the all-time largest debt and were bleeding masses of jobs daily. The economy was in a freefall and there was even a question of whether all the banks would go under. The Affordable Care Act is not the problem. I would look first to Republican blanket obstruction, which is doing more damage in every area of growth than any other single problem or program and is holding down the economy and all the revenue it would create, preventing economic growth from subsuming the debt, as it did with the WW II debt and during the Clinton Administration with Reagan's debt (also a record amount at the time).

"1. Solyndra is an example of a futile attempt by a futile department to clean up the atmosphere."

So, we shouldn't try? Let the world warm when we could minimize the damage?

"And by the way, you know what the largest greenhouse gas is? Water vapor. What do you plan to do about that?"

Water vapor it is not out of balance and isn't increasing as a percentage of the atmosphere like carbon, methane, and other gasses are. You are not in agreement with the U.S. Academy of Sciences, the National Oceanic and Atmospheric Organization (NOAA), NASA, the European Academy of Sciences, the British Academy of Sciences, the European Science Foundation, the African Academy of Sciences, the International Council of Academies of Engineering and Technological Sciences, the American Chemical Society, the American Institute of Physics, the American Physical Society, the Australian Institute of Physics, the European Physical Society, the American Geophysical Union, the American Society of Agronomy, the Crop and Soil Science Society of America, the European Federation of Geologists, The European Geosciences Union, the Goelogical Society of America, the Geological Society of London, the International Union of Geodesy and Geophysics, the American Meteorological Society, the Australian Meteorological and Oceanographic Society, the Canadian Foundation for Climate and Atmospheric Sciences, the Canadian Meteorological and Oceanographic Society, the Royal Meteorological Society, the World Meteorological Organization, the InterAcademy Council, the Union of Concerned Scientists, National Geographic, the United Nations, the Environmental Protection Agency...

"2. No it's not. Read the Constitution."

Of course government's job is to serve the people. Otherwise everything would go to hell. Criminals and fascist groups would seize your property, planes would crash, armies would invade, certain minorities might be murdered, or at the very least discriminated against much more than currently exists, snake oil would rule the supermarkets, malpractice would be rampant, and so on. The Constitution is merely a tool that helps us govern our country and the founding fathers realized that it would need to change as things changed in the world, and thus made it a living document.

"3. Tariffs."

Let's see the numbers. I don't think there's even a fraction of what we need to run the police, fire, emergency services, army, navy, air force, schools... and eliminating many of these things would lead to anarchy and make us much worse off. And what's wrong with people contributing to their society to make it a better place for themselves, as well as everyone else?

"4. In a capitalist society, people can spend their money as they wish."

So, as long as people can say they live in a 100% capitalist society everthing's hunky dory? What do people do when they're too old to work and an economic downturn ate up all their retirement money; or their children were crippled or died; or they couldn't have children? We can do better and give our people a better quality of life simply by going with the system that works best in each area and still have a 95% capitalist economy.

"5. Charities and local governments can help those people. The Federal government should not get involved."

One for one, and none for all, eh? I for one don't want to live in a gated community surrounded by enormous poverty, despair, crumbling infrastructure, violence, and a warming planet because everyone is too busy looking out for numero uno. Teamwork makes the world a better place and government needs to facilitate things when markets and systems don't work properly.

Under Democratic Presidents, the economy has faired much better. So, the facts don't support your arguments here either:
- Forbes
http://www.forbes.com/sites/adamhartung/2012/10/10/want-a-better-economy-history-says-vote-democrat/

* Personal disposable income has grown nearly 6 times more than under Republican Presidents
* Gross Domestic Product (GDP) has grown 7 times more than under Republican presidents
* Corporate profits have grown over 16% more per year than under Republican presidents (they actually declined under Republicans by an average of 4.53%/year)
* Average annual compound return on the stock market has been 18 times greater under Democratic presidents (If you invested $100k for 40 years of Republican administrations you had $126k at the end, if you invested $100k for 40 years of Democrat administrations you had $3.9M at the end)
* Republican presidents added 2.5 times more to the national debt than Democratic presidents
* The two times the economy steered into the ditch (Great Depression and Great Recession) were during Republican, laissez faire administrations

Sbyvl, you need to take a American history class and read The Jungle. The Gilded Age brought about horrible poverty, civil unrest, and massive class divisions. I won't even try to argue about anything else because G-Man covered it 100 times better than I ever could.

We need some relief from this heavy talk about politics and I have seen that no one else has said it...
'Murica!
:)

Sticks and Stones may break my bones... But nothing can hurt me as much as reading some of this...
#Foolishness #FeedingTrolls #ThisIsntWebdip

Sbyvl just wants slaves to work within his enclosed neighbourhood. He won't force them to work, he just won't feed them until they do.

Am I the only Economist present? Full disclosure, I teach the macroeconomics of the long term as opposed to business cycle fluctuations.

Initial proposal:
How is a tariff not a tax? How is it not a subsidy since it will adjust the relative prices of goods? The "revenue tariff" was a plank of the Democratic Party's platform from well before the Civil War up until Woodrow Wilson. It might be interesting as an experiment to see the effect of replacing a corporate income tax with a tariff as much of our "trade deficit" is really an accounting fiction using "transfer pricing" to game the corporate tax code. I'm unsure how abolishing money printing would work practically. Dollars don't last very long and most dollars created by my pay masters at the FED don't physically exist.

@kaner.....sounds like mercantilism to me as well.

I also don't know what a "liberal" is. Admittedly, John Bright would not approve.

The shift away from tariffs was the result of having enough government bureaucracy to tax more efficiently via income taxes. Money Printing (very cheap and highly distortionary), tariffs (more expensive and less distorting), income taxation of individuals (more and less), VAT (less and less). The old federal government was only really at the ports so a tariff system was the only large scale tax the feds could manage. The other big source of revenue was selling land. It is worth noting that 75% of the tariff revenue was collected at Southern ports in the lead up to the Civil War explaining much of the South's historic attitudes to a large and expensive federal government before the War.

@kaner.....the federal government does very little redistribution except on the revenue side. Our transfer system is from the middle aged to the old and not from the rich to the poor. We basically tax the top 3% to give it to the over 65 population, if one looks cold heartedly at the budget. I am not convinced that less federal spending leads to an explosion of violent crime.

@sbyvl....Again what is a Civil War among friends? I would argue that much of the sectionalism that led to the Civil War was the South wanting less central government because they were paying for all of it and the North wanting more because they weren't paying for much of any of it.

@Scordatura.....the better point would have been the Ming Dynasty in China. They turned inward as the richest society on Earth and two hundred years later were faced with British gun boats on the door step and were hopelessly behind.

General point: People underestimate the "pro-competitive" effects of trade. The disciplining of monopoly power is an enormous effect of trade. The most important trade is often times trade that never actually happens as domestic agents must alter their behavior to prevent market entry. A guy I know at the Minneapolis FED has built his entire career measuring and studying relatively big effects of trade that effectively never actually takes place. (BTW, I am a trade theorist by training)

General question: Am I the only person in America who thinks that our tax system (under W.) is remarkably close to the ideal? We generated half of all revenue from the top 2.7% of households while raising a level of revenue as a percentage of GDP equal to the long term average for the US with remarkable progressiveness. BTW, FDR regressed the tax code more than any President is US history. He paid for the New Deal with excise taxes on alcohol and tobacco. Such taxes generated almost 2/3 of federal revenue in 1937. These are about the most regressive taxes imaginable.

@Sbyvl....palace economies and feudalism as economic systems have the longest records of "working".

@valik.....the US doesn't trade that much by virtue of our being so big. I'm unsure why the Gold Standard would be "destructive". Uncertainty is largely the issue with monetary policy. We have debt structures that have certain assumptions built into them. The real question would be what adjustments would have to be made in saving and borrowing decisions and then how long that adjustment would require. Presuming that the government was viewed as having "commitment", expectations should reset quickly so it is just a matter of tallying up winners and losers before moving on to a new order. However, I am not sure that it would make that much of a difference.

@General Cool....the not quartering soldiers in private homes is generally related to the "taking" clause as it implies idiosyncratic taxation. The government cannot compel citizens to provide services without "fair" compensation. This is similar to the provision against depriving citizens of property without compensation.

@Shep.....everything FDR did was about perpetuating himself in office. Which is to say that he was a politician. He effectively ran for President calling Hoover a dangerous socialist and then immediately adopted the policies he ran against. But again the New Deal was paid for with regressive taxation much as European "socialism" is paid for. The first New Deal was largely corporate welfare benefiting the largest firms at the expense of smaller firms and the second New Deal forced them to cut their workers in on the spoils. This more "corporatist" than "socialist" in my book.

@G-Man.....Good God, where do I find the time and energy to even start? DARPA and NSF vs. loan guaranties is a monstrous chasm. Lincoln doing something does not make that thing either right or Constitutional. Most of what you list is and has always been done at the state level rather than the federal level. A relatively modest portion of federal outlays goes to the things you list that are federal provisions. The main response a reasonable person would have to being informed about the issues at hand should be amazement at how little money is in our politics given the return on investment. Citizens United was rightly decided much as Kelo was on the merits. This comes down to what the purpose of "insurance" is. The purpose as I understand it is to deliver me my expected value given idiosyncratic shocks. This is different from shielding me from heterogeneity. I being a non-smoking, non-drinking white male of high education with low cholesterol and no family history of heart disease have a certain generalized probability of having health problems and insurance can assure me of my predicted cost stream from healthcare. If I am not being asked to pay my expected cost then it is not an "insurance" scheme but is a redistribution scheme. And just to address the theme of corporate greed and the profit motive drives healthcare rationing, insurance companies aim to break even on premiums; their profits come from their effectively free borrowing on the "carry". This is where Warren Buffett's wealth largely comes from in that he was investing with 160% leverage virtually for free from his insurance holdings. Additionally, a free rider problem exists as other societies benefit from R&D that our system pays for. Similarly, our population is much more heterogeneous than most societies with supposedly better outcomes than us. Ethnic Swedes in the Minnesota stack up pretty well with ethnic Swedes in Sweden on healthcare outcomes. I find odd the claim to have identified 150 "compromises" with an opposition that delivered not a single vote. This is at odds with my working definition of the word.

@General Cool.....The USA has been the biggest economy on Earth for a very long time. The slave holding South actively opposed the system that he described and then ceased to exist as the system carried on for half a century or so. There also aren't many labor unions today outside of the public sector.

General Remark: The USA has grown at around 2% per year as measured in real GDP divided by the working aged population from 1790 to today. There have been few if any periods of accelerated or diminished growth over the centuries outside of the Great Depression and the catch up that followed. Any arguments about optimal policy regimes have a difficult time wrestling with this fact. Not much that we have done has made much of a difference.

@General Cool....Reagan is a horrible recession followed by an accelerated period of catch up. Overall growth was nothing to write home about. Thatcher might be an argument for an inflection point, but Reagan is a bit meh. He made the tax code more progressive which is not something generally associated with his name but other than that most of what he is credited and blamed for was outside of his control and actions. Most of the inflection points in both policy and data happened well before he was elected. Additionally, what are these things that can be done to "help" and who precisely are these "people"?

@sbyvl....the 1920 "depression" is generally viewed as a result of the post war demobilization and was global in nature. One interesting point is that the hyperinflations in Germany, Italy, Poland and the former Hapsburg states may have served as a circuit breaker in terms of the deflation spiral in the USA, France and UK. I'm also interested given your themes seem to be endorsing a "Post hoc ergo propter hoc" attitude with regard to government policy when you seem to agree with the choices.

General Comment: I am not sure that people here fully understand how big our deficits are in terms of our spending. Obamacare is not the root problem. The complete lack of growth is the problem. Given the long term trend in US growth, we are roughly 11% below potential and this growth should be quite easy to achieve. Why the economy has not bounced back presumably has little to do with either Obamacare or the behavior of the minority opposition in Congress. There are no "Cactus Jack" Garners in Congress actively trying to run the economy into a ditch for political gain. Note that the House of Representatives published a list of all banks that borrowed money from the RFC causing runs and bankruptcies which led to the "banking holiday" of 1933.

Interesting Side Point: There used to be a theme among historian to point to taxation as being the key different between the US and Germany in the Gilded Age. The US adopted progressive taxation at the federal level and regressive taxation at the state level whereas Germany adopted regressive taxation at the Central level and progressive taxation at the state level. They then claimed that this was the key aspect which defined the nature of the political institutions as opposed to the natures of the institutions defining the policy choices. Think of Big Business and its relationship with the central government.

@G-Man.....when exactly did sbyvl mention partisan politics? Also, arguing that either Hoover or George W. Bush were laissez faire makes me question your understanding of the term. But on a broader note, believing that government policies on the day to day level impact business cycles seems specious to me. The two cycles that you mentioned were both clearly global events as were the 1982 recession and the 1974 recession which were of compatible magnitude and also under Republican Presidents. The principle things which characterize your two from the other two is the lack of recoveries under the Democratic Presidents who followed, whereas Reagan and Ford saw recoveries. While I find your points idiotic, I am not sure that it is really one you would wish to make. Presidents don't really have that much influence on the occurrence of business cycles. There is not nor has there ever been much of a trend in the long run growth rate of the US economy based upon the political affiliation of the President in office. The USA has averaged almost exactly a 2% rise in real living standards per year since the founding of the Republic. Year to year swings in corporate profits and the stock market are statistical coincidences linked to tops and bottoms of business cycles which have been remarkably global in nature. US Democratic Presidents presumably have a nearly identical relationship with these variables in Germany and CDU vs. SDP Chancellors in Germany probably yield even more stark comparisons with US variables given the 1968-1983 cycle in Germany.

While I'm only in my second year of an econ major, I want to give a +1 to gopher, best economics related post I have seen by anyone in a while.

I only read the first half though, so I hope you didn't say anything incriminating towards the end.

tl; dr eh?
But yea, I'm sure gopher's post worth reading, so I'm gonna spend some time on some other day to have a good read on it.

Generally speaking, if it is true that sbyvl is suggesting a backtracking process to solve current problems, it would be rather counter-intuitive ... When people of the earlier centuries thought that they would never have something as great as a computer, we learnt three lessons from them:
1. Those dudes were wrong;
2. Those dudes were wrong; and,
3. Those dudes were wrong!

Maybe the example is just meh, but the point is that looking back into history does not turn a current impossibility into a possibility.

@gopher - sbyvl is also an economist, his shining rays of insight are dazzling to my eyes.

on another note we miss you man, when are you going to sign up for a game again? or do I have to make that Russian Revolution variant before you are tempted back into diplo-contest?

Hi haven't read all of the answers, so I'm possibly repeating things that have been said already, but these are my thoughts on sbyvl's original points:

1) Eliminate all federal taxes, including, but not limited to, those on income and corporations. Replace with a tariff system on foreign imports.
-> You hopefully do realize that the US has a import/export deficit of around 800 billion dollars? You are dependent on these exports, if you raise the taxes on them, your living quality will decline as less will be imported, and you would never make enough money through that to finance the whole state.

2) Eliminate all federal subsidies, including, but not limited to, those to corporations, as well as, Social Security, Medicare, Medicaid, Welfare, and Food stamps.
-> This is a very personal thing of course, but having grown up in Germany, I think that federal subsidies are very good for both the economy and the people. Sometimes people need help and a little time to get a new job, and who else should provide that?

3) Eliminate the bureaucracies, including, but not limited to, the NSA, and the TSA.
-> aye, you could probably eliminate the others...but apart from that bureaucracy is needed to run the state, I don't really get that point.

4) Control inflation by putting a moratorium on printing money. This will cause the value of the Dollar to skyrocket, making everyone wealthier immediately.
-> Thats quite wrong because of several reasons:
-your money will be worth more, so you can import even MORE, but on the other hand the prices will be higher, so actually the value of your money won't change that much (see point one)
-it will make it very hard or nearly impossible for your companies to export, as your prices are way too high
-the US debts will rise further, not in total numbers, but with the value of the dollar, the value of your debts will rise too

5) Cut $2 Trillion in government spending. This can be achieved through the things mentioned above, and by eliminating things like the National Parks and other ridiculous public works projects. End all pork barrel spending.
->why would you eliminate the National parks? Where will you spend some free time? I love to spend some time in the park...also, I doubt that that makes really such a high amount of your spendings. Why don't you propose to cut the military budget instead? I doubt the US really needs such a big army and several wars.

Also, the country needs a working infrastructure or the economy can't work properly...that too has to be paid. Summarizing, I think that I am possibly a libtard (stupid word), but in that case you are a capitalistdumbtard ;) :DD

*3) ...eliminate the NSA

Sbyvl won't understand that it's just not physically possible on so many levels.