5 ms·

So private companies with the monopoly of force the government has. Again, the private part isn't the problem. It's the privilege government gives them through

So private companies with the monopoly of force the government has. Again, the private part isn't the problem. It's the privilege government gives them through exclusive deals to pick the electorate's pockets.

ChrisLTD 10y ago
I wouldn’t be surprised to learn that a lot of these deals come from constrained government budgets rather than corruption. The conservative movement has been very effective at keeping taxes and government revenue low since the 1980s.
- dpeterson 10y ago
  Yes, because every problem is easily solved if we only taxed everyone and everything into oblivion. Couldn't have anything to do with the government taking and printing endless streams of cash, wasting it to buy votes, then using their monopoly of force to prevent competition when they hand over the bungled job to private firms.
  - ChrisLTD 10y ago
    There is a middle ground between inadequate taxes and taxing into "oblivion".
    - briandear 10y ago
      Exactly. The Laffer Curve is very good at demonstrating this.
  - ubernostrum 10y ago
    On the local level -- which is where these monopolies are handed out -- it's actually been decades of "cut taxes, then cut taxes, then if it's not working cut taxes, and if you still have budget problems try a tax cut or ten, then cut taxes some more, then try a tax cut, and if you don't have any other ideas, maybe a tax cut will help". Which has predictably resulted in basic services being cut and things that even the hardest ultra-hardcore libertarian wants government to do -- like providing police and courts to enforce contracts and property rights -- having to resort to overpolicing in order to collect money from citations, since that's the only revenue stream the "10 CUT TAXES; 20 GOTO 10" mentality will allow.
- yummyfajitas 10y ago
  This is simply not true. The conservative movement has utterly failed at keeping taxes and revenue low. https://fred.stlouisfed.org/series/W006RC1A027NBEA https://fred.stlouisfed.org/series/W006RC1A027NBEA https://fred.stlouisfed.org/series/B245RC1Q027SBEA https://fred.stlouisfed.org/series/B245RC1Q027SBEA https://fred.stlouisfed.org/series/S210400 https://fred.stlouisfed.org/series/S210400 https://fred.stlouisfed.org/series/W070RU1Q027NBEA https://fred.stlouisfed.org/series/W070RU1Q027NBEA If budgets are constrained, it's because spending has simply risen faster than tax revenue.
  - rigoleto 10y ago
    tax revenue as a percentage of GDP has been stable since WWII - http://www.taxpolicycenter.org/statistics/source-revenue-share-gdp http://www.taxpolicycenter.org/statistics/source-revenue-sha...
    - yummyfajitas 10y ago
      GDP has increased drastically. Similarly I'm personally budget constrained because as my income went up, I rented a larger house, bought an extra car, took more expensive vacations, and switched from street hookers to high class call girls, all the while consuming the same % of my income. Obviously I'm not budget constraint. I'm just spending a lot more money.
  - ChrisLTD 10y ago
    That's Federal government spending. I was thinking this was more of a city and state level issue.
- mindslight 10y ago
  The corruption aspect is because politicians, rather than doing a proper job of trading off taxes and services [0], are essentially selling off capital assets to shore up the balance sheet in the immediate term by creating a new ongoing liability. They individually take the credit, and their successors are left with the mess. (Never mind the deep-rooted federal corruption that has destroyed steady returns from debt and thus caused all of this dumb money to be scraping for returns via home run equity investment) [0] which requires pushing back against growing middle management bureaucracy, which consumes resources while providing no services.
- briandear 10y ago
  Low taxes don't represent lower government revenue. See the Laffer Curve. You also have a trade off between the maximum government revenue and maximum economic growth. Raising taxes past the growth maximizing point would increase revenues (to a certain point,) but then limit growth which would feedback and ultimately lower revenues. Given the idea that a 100% tax rate would result in near zero zero economic activity (nobody would have money to spend and nobody willingly works for free,) that result in near zero tax revenues. If we accept that a 100% tax rate would result in near-zero tax revenues and if we accept that a zero tax rate would also result in zero revenues, then it follows that there IS a point where revenue and growth are optimized and that point isn't necessarily close to 100% or zero. Many non-conservatives who dispute Laffer would be happy with a 75% tax rate, as their Keynesian (or alternatively, Marxist) belief is more plausible that the reality depicted by Laffer. However most people, Democrat and Republican, do believe in Laffer -- they just dispute where those revenue and growth maximizing points actually occur. The problem is that many Democrats don't care about Laffer (even though they do agree with the effects of the curve) -- they willingly chose to ignore Laffer because their convictions of economic "justice" supersede the rationality of Laffer. Meaning they know Laffer is correct, but they don't care: they'll sacrifice maximum revenue and maximum growth for maximum "fairness." Ironically, maximum "fairness" results in lower overall tax revenues this starving the very programs they insist are necessary. Then they blame conservatives because clearly x% is too low of a tax rate because "deficits." Belgium has a much higher tax rate (43% for a single person making the average salary) and New Zealand is about 16%.) The growth rate of Belgium is 1% and New Zealand is 3.5%. There are definitely more factors involved, but there is absolutely a correlation between growth, tax revenues and tax rates (a correlation illustrated by Laffer.) My point is that keeping tax rates low os not necessarily the same thing as keeping revenues low. We could argue the opposite with equal ferocity: non-conservatives have kept government revenues low by keeping tax rates high. To be honest though, conservatives do favor the left side of Laffer, even at the expense of revenues because the growth maximizing point is to the left of the revenue maximizing point. The non-conservatives favor the right side of the curve (closer to the revenue maximizing point) even at the expense of growth. I could only wish our tax policy were based purely on math rather than politics. Voters decide what growth rate they want, we enter that into the system and the tax rate is dynamically calculated. The tax rate would then be a result of economic reality rather than the cause. The political debate would then "simply" be: how much growth do we want? Unfortunatly tax policy is used to reward or punish those whose politics are on the 'correct' side of the winning political party.

ChrisLTD 10y ago

I wouldn’t be surprised to learn that a lot of these deals come from constrained government budgets rather than corruption. The conservative movement has been very effective at keeping taxes and government revenue low since the 1980s.

dpeterson 10y ago
Yes, because every problem is easily solved if we only taxed everyone and everything into oblivion. Couldn't have anything to do with the government taking and printing endless streams of cash, wasting it to buy votes, then using their monopoly of force to prevent competition when they hand over the bungled job to private firms.
- ChrisLTD 10y ago
  There is a middle ground between inadequate taxes and taxing into "oblivion".
  - briandear 10y ago
    Exactly. The Laffer Curve is very good at demonstrating this.
- ubernostrum 10y ago
  On the local level -- which is where these monopolies are handed out -- it's actually been decades of "cut taxes, then cut taxes, then if it's not working cut taxes, and if you still have budget problems try a tax cut or ten, then cut taxes some more, then try a tax cut, and if you don't have any other ideas, maybe a tax cut will help". Which has predictably resulted in basic services being cut and things that even the hardest ultra-hardcore libertarian wants government to do -- like providing police and courts to enforce contracts and property rights -- having to resort to overpolicing in order to collect money from citations, since that's the only revenue stream the "10 CUT TAXES; 20 GOTO 10" mentality will allow.
yummyfajitas 10y ago
This is simply not true. The conservative movement has utterly failed at keeping taxes and revenue low. https://fred.stlouisfed.org/series/W006RC1A027NBEA https://fred.stlouisfed.org/series/W006RC1A027NBEA https://fred.stlouisfed.org/series/B245RC1Q027SBEA https://fred.stlouisfed.org/series/B245RC1Q027SBEA https://fred.stlouisfed.org/series/S210400 https://fred.stlouisfed.org/series/S210400 https://fred.stlouisfed.org/series/W070RU1Q027NBEA https://fred.stlouisfed.org/series/W070RU1Q027NBEA If budgets are constrained, it's because spending has simply risen faster than tax revenue.
- rigoleto 10y ago
  tax revenue as a percentage of GDP has been stable since WWII - http://www.taxpolicycenter.org/statistics/source-revenue-share-gdp http://www.taxpolicycenter.org/statistics/source-revenue-sha...
  - yummyfajitas 10y ago
    GDP has increased drastically. Similarly I'm personally budget constrained because as my income went up, I rented a larger house, bought an extra car, took more expensive vacations, and switched from street hookers to high class call girls, all the while consuming the same % of my income. Obviously I'm not budget constraint. I'm just spending a lot more money.
- ChrisLTD 10y ago
  That's Federal government spending. I was thinking this was more of a city and state level issue.
mindslight 10y ago
The corruption aspect is because politicians, rather than doing a proper job of trading off taxes and services [0], are essentially selling off capital assets to shore up the balance sheet in the immediate term by creating a new ongoing liability. They individually take the credit, and their successors are left with the mess. (Never mind the deep-rooted federal corruption that has destroyed steady returns from debt and thus caused all of this dumb money to be scraping for returns via home run equity investment) [0] which requires pushing back against growing middle management bureaucracy, which consumes resources while providing no services.
briandear 10y ago
Low taxes don't represent lower government revenue. See the Laffer Curve. You also have a trade off between the maximum government revenue and maximum economic growth. Raising taxes past the growth maximizing point would increase revenues (to a certain point,) but then limit growth which would feedback and ultimately lower revenues. Given the idea that a 100% tax rate would result in near zero zero economic activity (nobody would have money to spend and nobody willingly works for free,) that result in near zero tax revenues. If we accept that a 100% tax rate would result in near-zero tax revenues and if we accept that a zero tax rate would also result in zero revenues, then it follows that there IS a point where revenue and growth are optimized and that point isn't necessarily close to 100% or zero. Many non-conservatives who dispute Laffer would be happy with a 75% tax rate, as their Keynesian (or alternatively, Marxist) belief is more plausible that the reality depicted by Laffer. However most people, Democrat and Republican, do believe in Laffer -- they just dispute where those revenue and growth maximizing points actually occur. The problem is that many Democrats don't care about Laffer (even though they do agree with the effects of the curve) -- they willingly chose to ignore Laffer because their convictions of economic "justice" supersede the rationality of Laffer. Meaning they know Laffer is correct, but they don't care: they'll sacrifice maximum revenue and maximum growth for maximum "fairness." Ironically, maximum "fairness" results in lower overall tax revenues this starving the very programs they insist are necessary. Then they blame conservatives because clearly x% is too low of a tax rate because "deficits." Belgium has a much higher tax rate (43% for a single person making the average salary) and New Zealand is about 16%.) The growth rate of Belgium is 1% and New Zealand is 3.5%. There are definitely more factors involved, but there is absolutely a correlation between growth, tax revenues and tax rates (a correlation illustrated by Laffer.) My point is that keeping tax rates low os not necessarily the same thing as keeping revenues low. We could argue the opposite with equal ferocity: non-conservatives have kept government revenues low by keeping tax rates high. To be honest though, conservatives do favor the left side of Laffer, even at the expense of revenues because the growth maximizing point is to the left of the revenue maximizing point. The non-conservatives favor the right side of the curve (closer to the revenue maximizing point) even at the expense of growth. I could only wish our tax policy were based purely on math rather than politics. Voters decide what growth rate they want, we enter that into the system and the tax rate is dynamically calculated. The tax rate would then be a result of economic reality rather than the cause. The political debate would then "simply" be: how much growth do we want? Unfortunatly tax policy is used to reward or punish those whose politics are on the 'correct' side of the winning political party.