5 ms·

> But there's no zero sum here Government spending via redistribution is absolutely zero sum. Every dollar spent by the government into the economy is one dol

> But there's no zero sum here Government spending via redistribution is absolutely zero sum. Every dollar spent by the government into the economy is one dollar taxed out of the economy. Money that is given to some has to necessarily come from others. Just because the benefits are concentrated and the harm is spread out doesn't change the fact that you've only taken money from A and given to B. No additional wealth or prosperity is being created in that transaction. Now, it may be the case that once B has the money, he spends or invests it more efficiently (in new skills, new assets or what have you) than A would have. But such a multiplier effect, if it happens, is happening in spite of, not because of, government redistribution. > Hopefully, at every step of the redistribution, at every split, some wealth was generated The key word is "Hopefully." It is highly unlikely that a government bureaucracy will distribute money such that it is spent more efficiently and productively than an individual taxpayer would if he still had the money to spend himself. Yes, the economy creates wealth, but only when productivity increases. Redistribution does not create any wealth, only "spreads it around," except for the rare cases when someone in the bureaucracy makes a better decision with the money than the people who paid it in taxes. But I can't really think of a time that has been the case...

mturmon 12y ago
"It is highly unlikely that a government bureaucracy will distribute money such that it is spent more efficiently and productively than an individual taxpayer would if he still had the money to spend himself." This talking point does not hold up to scrutiny. There are plenty of examples where individuals fail to build infrastructure that, if built, would help everyone much more than the cumulative cost to build the infrastructure. The same goes for research and technology development. Basically, the talking point assumes that individuals are rational economic actors in a rational market, and this is just not true. Additionally, even if the individuals were rational and fully informed, there will be highly suboptimal Nash equilibria.
- logicchains 12y ago
  It doesn't assume that individuals are 'rational'; it assumes productivity/efficiency of spending is determined by the spending's ability to fulfill individuals' preferences at the time of spending. In that sense, in the case where they don't give the money voluntarily to the government, however it spends it is by definition not the way they most wanted to spend it at that moment, hence is necessarily an outcome producing lesser utility to them at that movement then if they had spent it the way they most preferred to spend it.
TheSoftwareGuy 12y ago
>Every dollar spent by the government into the economy is one dollar taxed out of the economy Not at all, most governments print their country's currency.
sliverstorm 12y ago
To simplify what a lot of people are arguing, dollars spent by the government are dollars going into science that would have otherwise gone to <some place that isn't science>. To a country with little established science, this can be a gigantic booster shot to their domestic science abilities both through funding and in the case of space programs, inspiring youth. As we awknowledge that a healthy scientific community is an economic boon, one could say that money is taken from A, redistributed to B by the government, and in the process creating industry C which will hugely benefit the country in the future. A modest, very simple example is the US National Park Service. It runs a profit! Government dollars create the Parks, and obviously they are a good that is worth more to the public than the taxes it cost to make them. But that generally would not happen without Government intervention.
HCIdivision17 12y ago
I think I fundamentally disagree with this outlook, but mostly on tone, not principle. Yes, I used the word "hopefully" in that sentence in a non-accidental way: boondoggles happen. A lot. They also don't happen a lot. Modern governments are huge, on a scale that has never existed before [0]. Expect frequent outliers in every direction. Government spending must be essentially zero sum, since it almost exclusively must spend within a closed system (it'd be a bit silly for it to primarily spend on some other country's, after all). But to say that government spending can't be as productive as individual taxpayer spending is sort of misunderstanding scope. The typical person can't be bothered to deal with the coordination of funding all the things they'd like; the number of services that gently affect our lives is staggering. To suggest the individual administrate such spending is like suggesting we generate a line item for everything the government provides and be able to select what we personally want from it; there's a utopia to be had there, but holy mackerel the logistical coordination and administrative overhead for such a system would be mind-bogglingly complex and large, or the life simple, dull, and risky. I bet there's a Murphy's Law corollary somewhere that suggests such a fair replacement is at least as dysfunctional as the current system (heck, I'll just invoke the central theorem of Systemantics [1]). Anyhow, the win here is that governments can concentrate money to generate a kind of critical mass, It can create opportunities that otherwise couldn't germinate (and, well, often don't). Some accomplishments require ridiculous amounts of money - more than a person could ever hope to have. Until very recently (say last ten years?), it hasn't been possible for extremely large groups of people to coordinate resources for extremely large technologically and logistically complex projects without also having a very direct, obvious, and positive feedback mechanism (read: short-term profit); crowd sourcing may actually be a fantastic replacement economically for government's deep pockets, but we're absolutely not there yet. And without that insane access to enormous capital, we simply can't bootstrap many of these industries. There are notable exceptions, but they're notable because of how uncommon and unlikely they are; legends arise from powerful individuals building massive industry sectors, but rarely without extensive help from the government (obligatory references to Standard Oil and SpaceX). So we rely on the government to do such things as bootstrap super-capital intensive stuff. The sort of things that require billions to begin and decades to mature. And 50 years later, it's clearly paying off! What once required tens of billions to do once now can be done for tens of millions! And it's gotten so mature, the private sector is finally starting to compete with the government... here. I'm not going to argue the value of a space program. It's so deeply integral to the magic of modern life it's dizzyingly complex to even contemplate listing. Like trying to figure out if it was worth Bell Labs allowing the transistor to be invented. India's got a helluva scrappy space program. It manages to do a lot of things right, and as noted elsewhere by 'tn13 [2], it may even be profitable! (I have no idea how to figure out if that's actually true - it's tricky to figure out if individual sections of a plant are stand-alone profitable, let alone a complex government entity!) [0] http://www.goodreads.com/quotes/104873-there-are-10-11-stars-in-the-galaxy-that-used-to http://www.goodreads.com/quotes/104873-there-are-10-11-stars... [1] http://en.wikipedia.org/wiki/Systemantics#Premise http://en.wikipedia.org/wiki/Systemantics#Premise [2] https://news.ycombinator.com/item?id=8364632 https://news.ycombinator.com/item?id=8364632
anigbrowl 12y ago
Government spending via redistribution is absolutely zero sum. But you are mistakenly assuming that all government spending is redistributive, as if the only thing the government did was transfer payments. Government also provides services (sometimes by contracting out to the private sector) and invests in physical capital (likewise).
- cbeach 12y ago
  -Everything- that the government provides is paid for by taking money out of the real economy.
  - deleted 12y ago
    [deleted]
dragonwriter 12y ago
Redistribution is zero sum in dollars, but only zero sum in utility if you assume that the marginal utility of an additional dollar of income is constant to all recipients. But I think its pretty clear that money -- like most commodities -- has declining marginal utility, and that downward redistribution is positive sum in utility.
kaonashi 12y ago
> Government spending via redistribution is absolutely zero sum. Well, at the level of the currency issuer (of which India is one), Government spending is money creation, and not redistribution.
- logicchains 12y ago
  Money creation is still redistribution: redistribution to whoever first gets to spend the created money.
  - kaonashi 12y ago
    No, it's distribution. Sounds like you want an effective political system to oversee that distribution. Me too.
    - logicchains 12y ago
      It's distribution of money, but redistribution of purchasing power, for which money is used as a proxy.
      - kaonashi 12y ago
        Money isn't a proxy for anything, it's measuring and accounting.
        logicchains 12y ago
        Well whatever it is, creating new money and giving it to someone increases their purchasing power compared to what it was previously, which all other things being equal means a reduction in everyone else's purchasing power.
        kaonashi 12y ago
        That depends entirely on how much excess capacity there is, it's not per se inflationary. If you mobilize idle capacity with new money, then you're increasing the size of the pie (more money chasing after more goods).
mattlutze 12y ago
I'm not sure whether the parent commenter meant "zero sum" in a pure fiscal sense or as a descriptor of productivity/capability/something-not-money. Yes, a dollar taken from someone and given to another is a net null. But when we consider scale and efficacy of large organizational actors, perhaps we notice the potential of these tax dollars. It's not just the individual line A to B that must be considered. It's A to Gov to B. I can't fund high-capacity battery research the same way the government can. I'd need to find, say, 10,000 other folks to throw $100 into a pool that we could give to a researcher to fund her experiments. She hires help, does work, maybe something comes from it. But, How do we know she's using our money as intended? How do we know she's producing results, and the quality of those? How do we select her from all the other applicants? Well, let's hire an auditor to check that the money is being used appropriately. Then, we need other folks in her field to confirm for us that her research is productive. We'd also need those experts (or others) to help in the technical review of her proposal against other proposals to select the most beneficial one. Interestingly, it all starts to look like a bureaucracy. Because that's ultimately what a government, in all its spite, ends up providing -- a shared set of resources through which a society can effect greater change as a whole on itself than it could individually. I'm sorry that your experiences and epistemology lead you toward contempt for such an apparatus, but please recognize the benefits and net-positive effect, particularly to science and engineering, such an organization has demonstrably provided.
deleted 12y ago
[deleted]

mturmon 12y ago

"It is highly unlikely that a government bureaucracy will distribute money such that it is spent more efficiently and productively than an individual taxpayer would if he still had the money to spend himself." This talking point does not hold up to scrutiny. There are plenty of examples where individuals fail to build infrastructure that, if built, would help everyone much more than the cumulative cost to build the infrastructure. The same goes for research and technology development. Basically, the talking point assumes that individuals are rational economic actors in a rational market, and this is just not true. Additionally, even if the individuals were rational and fully informed, there will be highly suboptimal Nash equilibria.

logicchains 12y ago
It doesn't assume that individuals are 'rational'; it assumes productivity/efficiency of spending is determined by the spending's ability to fulfill individuals' preferences at the time of spending. In that sense, in the case where they don't give the money voluntarily to the government, however it spends it is by definition not the way they most wanted to spend it at that moment, hence is necessarily an outcome producing lesser utility to them at that movement then if they had spent it the way they most preferred to spend it.

TheSoftwareGuy 12y ago

>Every dollar spent by the government into the economy is one dollar taxed out of the economy Not at all, most governments print their country's currency.

sliverstorm 12y ago

To simplify what a lot of people are arguing, dollars spent by the government are dollars going into science that would have otherwise gone to <some place that isn't science>. To a country with little established science, this can be a gigantic booster shot to their domestic science abilities both through funding and in the case of space programs, inspiring youth. As we awknowledge that a healthy scientific community is an economic boon, one could say that money is taken from A, redistributed to B by the government, and in the process creating industry C which will hugely benefit the country in the future. A modest, very simple example is the US National Park Service. It runs a profit! Government dollars create the Parks, and obviously they are a good that is worth more to the public than the taxes it cost to make them. But that generally would not happen without Government intervention.

HCIdivision17 12y ago

I think I fundamentally disagree with this outlook, but mostly on tone, not principle. Yes, I used the word "hopefully" in that sentence in a non-accidental way: boondoggles happen. A lot. They also don't happen a lot. Modern governments are huge, on a scale that has never existed before [0]. Expect frequent outliers in every direction. Government spending must be essentially zero sum, since it almost exclusively must spend within a closed system (it'd be a bit silly for it to primarily spend on some other country's, after all). But to say that government spending can't be as productive as individual taxpayer spending is sort of misunderstanding scope. The typical person can't be bothered to deal with the coordination of funding all the things they'd like; the number of services that gently affect our lives is staggering. To suggest the individual administrate such spending is like suggesting we generate a line item for everything the government provides and be able to select what we personally want from it; there's a utopia to be had there, but holy mackerel the logistical coordination and administrative overhead for such a system would be mind-bogglingly complex and large, or the life simple, dull, and risky. I bet there's a Murphy's Law corollary somewhere that suggests such a fair replacement is at least as dysfunctional as the current system (heck, I'll just invoke the central theorem of Systemantics [1]). Anyhow, the win here is that governments can concentrate money to generate a kind of critical mass, It can create opportunities that otherwise couldn't germinate (and, well, often don't). Some accomplishments require ridiculous amounts of money - more than a person could ever hope to have. Until very recently (say last ten years?), it hasn't been possible for extremely large groups of people to coordinate resources for extremely large technologically and logistically complex projects without also having a very direct, obvious, and positive feedback mechanism (read: short-term profit); crowd sourcing may actually be a fantastic replacement economically for government's deep pockets, but we're absolutely not there yet. And without that insane access to enormous capital, we simply can't bootstrap many of these industries. There are notable exceptions, but they're notable because of how uncommon and unlikely they are; legends arise from powerful individuals building massive industry sectors, but rarely without extensive help from the government (obligatory references to Standard Oil and SpaceX). So we rely on the government to do such things as bootstrap super-capital intensive stuff. The sort of things that require billions to begin and decades to mature. And 50 years later, it's clearly paying off! What once required tens of billions to do once now can be done for tens of millions! And it's gotten so mature, the private sector is finally starting to compete with the government... here. I'm not going to argue the value of a space program. It's so deeply integral to the magic of modern life it's dizzyingly complex to even contemplate listing. Like trying to figure out if it was worth Bell Labs allowing the transistor to be invented. India's got a helluva scrappy space program. It manages to do a lot of things right, and as noted elsewhere by 'tn13 [2], it may even be profitable! (I have no idea how to figure out if that's actually true - it's tricky to figure out if individual sections of a plant are stand-alone profitable, let alone a complex government entity!) [0] http://www.goodreads.com/quotes/104873-there-are-10-11-stars-in-the-galaxy-that-used-to http://www.goodreads.com/quotes/104873-there-are-10-11-stars... [1] http://en.wikipedia.org/wiki/Systemantics#Premise http://en.wikipedia.org/wiki/Systemantics#Premise [2] https://news.ycombinator.com/item?id=8364632 https://news.ycombinator.com/item?id=8364632

anigbrowl 12y ago

Government spending via redistribution is absolutely zero sum. But you are mistakenly assuming that all government spending is redistributive, as if the only thing the government did was transfer payments. Government also provides services (sometimes by contracting out to the private sector) and invests in physical capital (likewise).

cbeach 12y ago
-Everything- that the government provides is paid for by taking money out of the real economy.
- deleted 12y ago
  [deleted]

dragonwriter 12y ago

Redistribution is zero sum in dollars, but only zero sum in utility if you assume that the marginal utility of an additional dollar of income is constant to all recipients. But I think its pretty clear that money -- like most commodities -- has declining marginal utility, and that downward redistribution is positive sum in utility.

kaonashi 12y ago

> Government spending via redistribution is absolutely zero sum. Well, at the level of the currency issuer (of which India is one), Government spending is money creation, and not redistribution.

logicchains 12y ago
Money creation is still redistribution: redistribution to whoever first gets to spend the created money.
- kaonashi 12y ago
  No, it's distribution. Sounds like you want an effective political system to oversee that distribution. Me too.
  - logicchains 12y ago
    It's distribution of money, but redistribution of purchasing power, for which money is used as a proxy.
    - kaonashi 12y ago
      Money isn't a proxy for anything, it's measuring and accounting.
      - logicchains 12y ago
        Well whatever it is, creating new money and giving it to someone increases their purchasing power compared to what it was previously, which all other things being equal means a reduction in everyone else's purchasing power.
        kaonashi 12y ago
        That depends entirely on how much excess capacity there is, it's not per se inflationary. If you mobilize idle capacity with new money, then you're increasing the size of the pie (more money chasing after more goods).

mattlutze 12y ago

I'm not sure whether the parent commenter meant "zero sum" in a pure fiscal sense or as a descriptor of productivity/capability/something-not-money. Yes, a dollar taken from someone and given to another is a net null. But when we consider scale and efficacy of large organizational actors, perhaps we notice the potential of these tax dollars. It's not just the individual line A to B that must be considered. It's A to Gov to B. I can't fund high-capacity battery research the same way the government can. I'd need to find, say, 10,000 other folks to throw $100 into a pool that we could give to a researcher to fund her experiments. She hires help, does work, maybe something comes from it. But, How do we know she's using our money as intended? How do we know she's producing results, and the quality of those? How do we select her from all the other applicants? Well, let's hire an auditor to check that the money is being used appropriately. Then, we need other folks in her field to confirm for us that her research is productive. We'd also need those experts (or others) to help in the technical review of her proposal against other proposals to select the most beneficial one. Interestingly, it all starts to look like a bureaucracy. Because that's ultimately what a government, in all its spite, ends up providing -- a shared set of resources through which a society can effect greater change as a whole on itself than it could individually. I'm sorry that your experiences and epistemology lead you toward contempt for such an apparatus, but please recognize the benefits and net-positive effect, particularly to science and engineering, such an organization has demonstrably provided.

deleted 12y ago

[deleted]