May 8, 2010

Ongoing fights with conservatives

So there's this anarcho-capitalist person who every few months will send me an email asking my opinion on a subject, and the responding with reasons I'm wrong.

I don't know why they do this. Maybe they're just bored. Anyways, I figured I'd share the latest conversation here, because in it, I address a lot of Free Market Fallacies, which just won't seem to die. Their text is in red. Their text quoting me is in blue. My most recent response is in black. Without further ado:

"Second, social spending such as welfare actually increases your nation's GDP as more money is available to go towards goods and services rather than paying off debts, or going to the bare necessities, which leads to jobs creation, and a higher standard of living for everybody in society."
Not exactly. The people who are being taxed more don't have as much money to pay for goods and services. And the welfare recipients themselves, have no incentive to work and produce in the economy.
The math of that statement doesn't work out in real life. While taxing people less does allow the richest people to have more money, a lot of people in the USA (40%) don't make enough to pay any federal income taxes. When you cut social spending for things that facilitate our civilization, things like the infrastructure necessary for commerce, like roads, bridges, and rail, then those costs need to be born by the private sector, and by states. This means lower wages and lower benefits, and higher prices in the private sector. This also means higher property taxes and state income taxes.
What's more the bottom 40% of people contribute quite a lot to the economy in the way of labor, as well as commerce. The bottom 60% of the population only lays claim to something like 12% of the nation's wealth, but generate the bulk of it's GDP through labor and consumption. The top 10% lay claim to 85% of the nation's wealth, and contribute nearly nothing to the GDP. The poor get a bad wrap, and it's not deserved at all.
Now, if you tax the richest people, whose money is stagnant in savings accounts, and move that money into the public sector, spending on infrastructure there creates jobs building the stuff, it facilitates the movement of goods and services throughout the economy, and it relieves the private sector of the burden of shouldering those costs individually. Wal*Mart is able to keep it's prices low on a similar model-- by aggregating purchase power into one spot, you can reduce the overall cost.
It's this very principal that allows us to have Fire Departments rather than Private Fire Departments-- which the bulk of people would not be able to afford.

"Third, there are indeed problems with "the system." The solution is certainly not to scrap it."
I'm not so sure why not? The welfare programs have utterly failed in reducing any poverty.
That's simply not true. Poverty is a complex issue. You have mental health issues involved, you have macro- and micro-economic issues involved, you have social spending issues involved, you have drug abuse issues involved, you have cyclical poverty issues. There's no one reason why poverty exists, and to simplify it into talking points may make it seem easier to understand, but that understanding will be shallow and sorely lacking of any insight.

"the Medicare spending that is being 'cut' are subsidies to private insurance that were providing a duplicate role to what medicare already offers, but charging a higher price to do it. This money is going back to paying for medical care via Medicare, but will have more bang per buck as it's not going to pay for insurance company operating costs, or CEO bonuses, as well."
But the problem with medicare is, it's bankrupting us. It's costing us in the trillions, and only providing mediocre healthcare.
HA! Medicare doesn't PROVIDE healthcare. Doctors do. Medicare is a payment program.



"That sort of spending can be eliminated and replaced with purely public systems without harm being done to the system."
Public systems always cost more, and are more ineffective.
I'm sorry, based on what? That's just flatly false. You might find that that is true of consumer goods, but inelastic goods and life necessities, that's simply not the case.

"What can be done, however, is to first, increase availability of welfare, and shift the tax burden back to what it was in the 1950s, where the richest paid 65% in taxes, and the poorest got money back. Today the richest pay 35% in taxes, or less. "
Yeah, but the rich lead the way in social development. They create our jobs, and our economic prosperity. Taxing their hard earned money makes no sense.
Hard earned? Most people in the top 10% inherited their money, doing nothing to work for it. The idea that they lead the way in social development is sadly a conservative talking point, and a myth. Nothing more. Taxing their money makes perfect sense. Money only has value when it's being spent. If they're not spending it, then after they get their first few million dollars, we should be able to spend it for them on things that actually work for society.

Can you name me any ethnic or otherwise group of individuals who've achieved a better economic status because of a "government" program? I'm betting such a group doesn't exist.
My friend XXXXXX was a drug addict. He was homeless. He saw a social worker (for free) and went to a drug clinic to sober up (for free) and then was able to get into a state college (for free). He's now a successful self-employed business owner. Impoverished people being allowed to bus from poor school districts into richer school districts HAS in fact allowed many individuals to achieve better social and economic status.
The Military is another great example. My father was a high school drop out. He joined the Air Force, trained in meteorology.
His father came from nothing. He joined the Army and became career military. He was able to afford his family a comfortable middle class life on the GI Bill, and my grandmother still receives monthly pension checks from the Government despite his passing, and her being retired. She also receives social security.
Seniors have benefited from the passage of Social Security, and would only benefit even more if we increased social spending.
Maybe you just need to get out more.