How do we fix the economy???

biochem wrote:

Nico wrote:http://nymag.com/daily/intelligencer/2016/03/gop-must-answer-for-what-it-did-to-kansas.html

I would like to see a GOP-supporter's response to the content of the article I linked,

Kansas - The article references Kansas's economic theory - the classic slash taxes get government out of the way and the economy will soar model. And the article as is typical for left wing media showcases the downsides of the governmental budget cut portion of the plan. As is would be expected the WSJ showcases what upsides are measurable to date.

http://www.wsj.com/articles/seeded-with ... 1431729743

Left and right are both cherry picking statistics to fit their world view.

For my personal opinion: The changes were put in place during the 2010-13 time period. So they've basically be in place for about 3 years. At this point I'm with the too soon to tell crowd. The theory is that the tax cuts and other business friendly measures will attract new businesses to Kansas and inspire Kansas residents to start their own businesses or expand existing ones. Well the truth is that starting new businesses, attracting businesses movement etc takes time and one shouldn't expect to see a lot of economic growth in a 3 year time period (no matter how much the cheerleaders promise immediate gratification). But one would expect to see immediate pain. I really think that this needs to be evaluated at 10 years out not at 3 years.

My best crystal ball guess for a 10 year reading: Economic growth will improve but not nearly as much as the cheerleaders hope. The budget cut pain will be reduced as alternative solutions are found. However this may actually be too far. I tend to be a big proponent of the "too much of anything" is bad theory and there is a genuine possibility that this plan is too much. Therefore I love the fact it was tried at the state level not the Federal one. I like trying these sorts of ideas as small scale before trying to scale up.

Lousiana - Louisiana isn't the best test case. Hurricane Katrina wrecked the state and that sort of damage can be long term (draconian population reduction as residents who fled don't come back, industries who try and fail to recover and then close etc etc). So a lot of the economic moves were really desperation moves, bribes to keep industry etc in the state.

The economic desperation moves didn't really work that well, the article is correct there. And since most of them occurred earlier than in Kansas there has been more time to evaluate their efficacy.

On the other hand the education desperation moves (ignored by the article's cherry picking) did work. After the hurricane wrecked the New Orleans school system, they switched by necessity to charter schools. Educational achievement (K-12) has soared ever since.

So Louisiana is a mixed bag. Some of their post hurricane desperation moves worked, some didn't.

Then there is some anti-Republican rhetoric about how the tax plans they are promising are unrealistic. Politicians promising exaggerated claims. To quote Casablana "I'm shocked shocked that gambling is going on in Rick's."

Basically the big problem is that neither party's economic plans are working. We desperately need some new ideas on how to fix the economy. The Republican solution to everything is cut taxes. The Democratic solution to everything is more welfare of various sorts. Neither seems to work the way it's proponents hope. So back to the title of the thread. "How do we fix the economy?" There are about 11 pages of ideas here. Some of them similar to portions of ideas presented by politicians some quite different. What are your thoughts on the various proposals Nico?

Dream on: Dream on: A large day dream is that all economists and politicians must account for how their ideas work in reality.

Someone or other wrote an SF story where a society had the lawmakers required to post, with amy law, the expected results, and their weighting of future votes depended on how close they were to reality. Dream on

It is certainly a good process to try things on a pilot scale before going into full production. It is also good to move slowly as often, something can produce short term advantages and long term disasters. Look at a history of about a generation for higher reliability. However, this requires a national government that allows real freedom at lower levels for experiments, which sociopaths do not like.

Daryl wrote:Mine is spread over a wide variety of investments. Investment houses that I rent out (not slums at the bottom but middling that will always get rented) which have returned about 5% plus about 10% capital gain so far -
my superannuation fund (over which mix I have some control) owns shopping centres in the UK and Australia plus a mix of shares and other stuff (about 8% tax free) - things to avoid expenditure like solar panels and a few acres - and at the bottom of it is a rock solid government worker pension, which enables me to be cheekier in other investments that I might be otherwise.

Tenshinai wrote:"="DDHvi"]In investing, some people suggest the 80/20 rule: invest 80% in what is solid, even if slow growing, 20% in possible rockets. Another splits three ways: slow and reliable; high yielding; and high growth possibilities."

I prefer to split my investment a different way, geographically.

There are no "solid" investments, end of story. There are more and less likely to act certain ways, but anyone who thinks ANY kind of investment is "solid" risks getting a panic attack eventually, because ALL stocks and shit crashes occasionally. And sometimes even the most solid stuff crashes completely.

So my investment is in investment funds divided up regionally. Equal share in one focused on Japan, one on Russia, one on EU/USA and one global with a specific industry focus instead.

All 4 tend to increase roughly the same over time, but over short time, it´s very common that 1 or 2 drops, while the others remain more unchanged or goes up.
Of course, at best, all 4 goes up.

As an example, checking right now, with the not so great market recently(last year was so much better it´s not funny), only the Russian fund has gone up since Jan 1st, but right today, it´s down 2% while the Japan and EU/USA goes up about .5%.

There is also the problem that when enough people start using the same strategy, it quits producing good results. My preference is to check out as many methods as there is time for: try them out on paper, then small amounts, then more. It is important always to evaluate changes. PS, while more stable than most, often governments find ways to take their pension money back: in the USA they are starting to tax some social security, or inflation; when the wife or I mention that a standard size candy bar once had a price of a nickel, many youth are surprised

In effect, when researching, I try to look for reasons NOT to invest that way, or in that company. But I do invest, in reality (garden, nut & fruit trees, ways of reducing costs, etc.) whenever possible. Also, the assumption is that there will be errors, usually due to untested assumptions.

I agree DDHiv. A significant segment of my investment strategy is expenditure avoidance.
My home energy costs are about $40 a year for gas bottles for our stove. Hot water and electricity come from the sun. Water is collected rainwater plus a bore, both pumped by the free electricity. Heating is by a modern woodheater, with no need for gym membership when cutting wood. We prefer healthy home cooked meals to take aways. By 60 I had refurbished all our major items like roof, fences, house cladding and such, so I shouldn't have to pay someone to do it when I'm too old and feeble.
Home economists do say that you should pay more attention to your expenditure than your income.

Bichem, it says a lot when your linked article is behind a pay wall.

Sent from my SM-G920I using Tapatalk

Annachie wrote:Bichem, it says a lot when your linked article is behind a pay wall.

Sent from my SM-G920I using Tapatalk

Sorry, it wasn't behind a paywall when I linked it. Their paywall system must have been on the blink. About 10% or so of the Journal's articles are free. I thought this was one of them.

Daryl wrote:I agree DDHiv. A significant segment of my investment strategy is expenditure avoidance.
My home energy costs are about $40 a year for gas bottles for our stove. Hot water and electricity come from the sun. Water is collected rainwater plus a bore, both pumped by the free electricity. Heating is by a modern woodheater, with no need for gym membership when cutting wood. We prefer healthy home cooked meals to take aways. By 60 I had refurbished all our major items like roof, fences, house cladding and such, so I shouldn't have to pay someone to do it when I'm too old and feeble.
Home economists do say that you should pay more attention to your expenditure than your income.

Expenditure avoidance is saving. Investment is when savings are used to either reduce future expenses or increase future incomes. I assume you read the Mother Earth News magazine, from what you say. Many of the things I've been doing come from that source.

biochem wrote:

Nico wrote:http://nymag.com/daily/intelligencer/2016/03/gop-must-answer-for-what-it-did-to-kansas.html

I would like to see a GOP-supporter's response to the content of the article I linked,

Kansas - The article references Kansas's economic theory - the classic slash taxes get government out of the way and the economy will soar model. And the article as is typical for left wing media showcases the downsides of the governmental budget cut portion of the plan. As is would be expected the WSJ showcases what upsides are measurable to date.

http://www.wsj.com/articles/seeded-with ... 1431729743

Left and right are both cherry picking statistics to fit their world view.

For my personal opinion: The changes were put in place during the 2010-13 time period. So they've basically be in place for about 3 years. At this point I'm with the too soon to tell crowd. The theory is that the tax cuts and other business friendly measures will attract new businesses to Kansas and inspire Kansas residents to start their own businesses or expand existing ones. Well the truth is that starting new businesses, attracting businesses movement etc takes time and one shouldn't expect to see a lot of economic growth in a 3 year time period (no matter how much the cheerleaders promise immediate gratification). But one would expect to see immediate pain. I really think that this needs to be evaluated at 10 years out not at 3 years.

My best crystal ball guess for a 10 year reading: Economic growth will improve but not nearly as much as the cheerleaders hope. The budget cut pain will be reduced as alternative solutions are found. However this may actually be too far. I tend to be a big proponent of the "too much of anything" is bad theory and there is a genuine possibility that this plan is too much. Therefore I love the fact it was tried at the state level not the Federal one. I like trying these sorts of ideas as small scale before trying to scale up.




Lousiana - Louisiana isn't the best test case. Hurricane Katrina wrecked the state and that sort of damage can be long term (draconian population reduction as residents who fled don't come back, industries who try and fail to recover and then close etc etc). So a lot of the economic moves were really desperation moves, bribes to keep industry etc in the state.

The economic desperation moves didn't really work that well, the article is correct there. And since most of them occurred earlier than in Kansas there has been more time to evaluate their efficacy.

On the other hand the education desperation moves (ignored by the article's cherry picking) did work. After the hurricane wrecked the New Orleans school system, they switched by necessity to charter schools. Educational achievement (K-12) has soared ever since.

So Louisiana is a mixed bag. Some of their post hurricane desperation moves worked, some didn't.



Then there is some anti-Republican rhetoric about how the tax plans they are promising are unrealistic. Politicians promising exaggerated claims. To quote Casablana "I'm shocked shocked that gambling is going on in Rick's."





Basically the big problem is that neither party's economic plans are working. We desperately need some new ideas on how to fix the economy. The Republican solution to everything is cut taxes. The Democratic solution to everything is more welfare of various sorts. Neither seems to work the way it's proponents hope. So back to the title of the thread. "How do we fix the economy?" There are about 11 pages of ideas here. Some of them similar to portions of ideas presented by politicians some quite different. What are your thoughts on the various proposals Nico?

Look, let's get one thing straight, I am unapologetically liberal in political outlook, worldview and sociocultural value system. I think that conservatism, as represented by the GOP policy making class, is just another term for those who champion an oligarchical caste system. In other words, a system where government is democratic in name only, but is in fact controlled by an entrenched class of unofficial aristos whose only concern is their own power and wealth. Every single policy statement coming out of the GOP establishment supports that supposition.

My grandmother had a favorite expression: too is never a good thing. In other words, moderation in all things.

An out of control welfare system simply is not financially viable over the medium-to-long term, and besides, it leads to personal and social stagnation. At the same time, we aren't isolated islands in a sea. Rather, I think of society as a vast inerconnected collective lifeform - if parts of society are left to exist in isolated, ignored misery, eventually the whole of society will suffer.

So, a vibrant economy needs a limited but effective welfare system that helps those who truly need help to survive, and provides a buffer for those who have temporarily stumbled until they can get back on their feet.

Education and universal access to decent, affordable and comprehensive health services aren't luxuries. They are vital components of any economic growth strategy. Obamacare might indeed have many problems, but it certainly beats the GOP's proposals - which seem to be more about protecting the vested interests of the investor class and may those who cannot pay suffer.

Infrastructure investment is just as important. But a bridge to nowhere someplace in the boondocks is just a waste of money. What is needed is an advisory body of professional experts who can counsel the policy makers on targeted investments.

Foreign economic developmental aid to less advanced countries can only be beneficial in terms of forein market stimulation, peace dividends and America's geopolitical strategic position. Less 'let's keep the dictator in power because he agrees with us' and more actual developmental investments that will benefit the target population as well as America's longterm interests.

Government regulation is a good thing, in moderation. Not enough to stifle economic growth but enough to prevent out-of-control exploitation and excess.

What's wrong with environmental protection? Tomorrow's children are also entitled to their fair share of our resources. Sustainable energy is NOT a foul phrase.

Social policies that promote tolerance and inclusivity are also important. This include equal wages for equal work, full and equal access to opportunities (meaning, good quality education even in the inner cities and in rural areas), and laws to prevent discrimination in the workplace and in business - including housing.

I can touch on many more topics, but one thing to remember is that there is nothing sacred about competition per se. Competitiveness is all good and well, but compassion and cooperation have their place too.

Nico wrote:
Look, let's get one thing straight, I am unapologetically liberal in political outlook, worldview and sociocultural value system. I think that conservatism, as represented by the GOP policy making class, is just another term for those who champion an oligarchical caste system. In other words, a system where government is democratic in name only, but is in fact controlled by an entrenched class of unofficial aristos whose only concern is their own power and wealth. Every single policy statement coming out of the GOP establishment supports that supposition.

You're also describing the Democrats. Oh there are rare exceptions (Sanders for example) who genuinely care about the common man. Most don't. Clinton for example certainly doesn't. I expect she may have in her early years, but as the saying goes, power corrupts.

And no the Republicans aren't any better. They just do less damage to the common man. Not because they intend to help the common man but because the unintended consequences of their policies are less damaging.

My grandmother had a favorite expression: too is never a good thing. In other words, moderation in all things.

We actually agree on something.

An out of control welfare system simply is not financially viable over the medium-to-long term, and besides, it leads to personal and social stagnation.

Wow we agree again.

At the same time, we aren't isolated islands in a sea. Rather, I think of society as a vast inerconnected collective lifeform - if parts of society are left to exist in isolated, ignored misery, eventually the whole of society will suffer.

Also true. Although I suspect we will disagree on the manner in which it is most effective to solve the ignored misery problem.

So, a vibrant economy needs a limited but effective welfare system that helps those who truly need help to survive, and provides a buffer for those who have temporarily stumbled until they can get back on their feet.

Actually I agree in principle, though I suspect we will disagree over the definitions of limited and effective.

Education and universal access to decent, affordable and comprehensive health services aren't luxuries. They are vital components of any economic growth strategy.

Actually correct. Though I suspect we will disagree on the best manner in which those services should be delivered.

Obamacare might indeed have many problems, but it certainly beats the GOP's proposals - which seem to be more about protecting the vested interests of the investor class and may those who cannot pay suffer.

Obamacare is an utter disaster and far worse than the system it replaced. It is a Frankenstein monster that combines the worst aspects of the free market system and the socialized medicine system. There are a few who are better off under Obamacare most are not.


1. Pre Obamacare: Elderly got care through Medicare from the government. The middle/upper classes supplement this with privately purchased Medigap policies that cover the holes. Post Obamacare: some cuts in benefits to pay for Obamacare so slightly worse off with the possibility of being considerably worse off in the future.

2. Pre Obamacare: People working for medium to large size companies, people with union membership and government employees were covered by group policies purchased by the company, union or government employer. They pay part of the cost. The employer/union pays part of the cost. Post Obamacare: plan costs are skyrocketing, deductibles are sky high and benefits are dropping as companies scramble to comply with the new mandates. Worse to come when the Cadillac penalties kick in. Definitely worse off.

3. Pre Obamacare: People who are poor were covered by Medicaid (aka welfare). Post Obamacare: Slightly worse off due to increased competition for access to the few providers who accept Medicaid due to the influx of new Medicaid patients.

4. Pre Obamacare: A small % of people buy private insurance as individual policies. These are expensive but sort of affordable if you have good health. Good luck paying for one if you don't. Post Obamacare: mixed bag. Similarly to #2 plan costs are skyrocketing, deductibles are sky high and benefits are dropping. This is partially compensated for by subsidies but the math varies by family. Some families do better with new plan plus subsidy, some were better off under the old system. And for those who preferred the cheap catastrophic plans, those are gone altogether and they have to buy expensive insurance instead.

5. The 15% of people who were without insurance. Post Obamacare: mixed bag

5a the under 26s on the parents insurance - net positive, and popular and Obamacare repeal is highly likely to retain this particular provision
5b. the not quite poor (just above medicaid level)- mixed, some still can't afford insurance even with subsidy so they are still uninsured plus have a penalty
5c. the uninsurable - mixed but mostly positive, these are people with chronic conditions, who couldn't get insurance before but who can now due to shall issue. However it's mixed because of the same problem as above, some still can't afford it.

After all this mess about 10% of the population is still uninsured. So Obama wrecked the entire healthcare system to insure 5% more people. There are a lot easier ways to insure 5% of the population without destroying the healthcare system for the rest. For example high risk pools such as the one Oregon had would have done a better job with the high risk crowd. And that popular let people stay on their parents insurance until age 26 could just about account for 5% by itself!

Infrastructure investment is just as important. But a bridge to nowhere someplace in the boondocks is just a waste of money.

And if the Democrats hadn't wasted all of the stimulus money by giving it to their friends we'd see more of this by now. We definitely need it. But it's sort of like giving money to your drug addicted cousin. Sure they promise that this time the money will go toward rent...

What is needed is an advisory body of professional experts who can counsel the policy makers on targeted investments.

Would be helpful. Get Romney to recommend some people. He's not my favorite guy but this is an area in which he has significant experience and skill. Warren Buffet could probably give some names as well. Just stay away from the usual crowd in DC. Those guys are completely incompetent.

Foreign economic developmental aid to less advanced countries can only be beneficial in terms of forein market stimulation, peace dividends and America's geopolitical strategic position. Less 'let's keep the dictator in power because he agrees with us' and more actual developmental investments that will benefit the target population as well as America's longterm interests.

Foreign aid is a disaster. The Foggy Bottom at state has a lot to answer for.

Government regulation is a good thing, in moderation. Not enough to stifle economic growth but enough to prevent out-of-control exploitation and excess.

Agreed. However the current regulatory schemes are a nightmare. And they are a huge compliance burden especially to small business. Big business has the economy of scale to help, but small business gets hammer with the compliance cost of all of these overdone regulations.

What's wrong with environmental protection? Tomorrow's children are also entitled to their fair share of our resources.

Environmentalism is a victim of it's own success. The low hanging fruit has been picked. Many of the proposals today are hideously expensive and provide little IF ANY benefit. Unfortunately to the green religion. Every environmental proposal should be championed on the chance it will improve the environment no matter how tiny. Remember the moderation in all things point above. Many of these folk definitely disagree with that.

Sustainable energy is NOT a foul phrase.

It is when it's an excuse to give lots of tax $$$ away to your friends.

Social policies that promote tolerance and inclusivity are also important. This include equal wages for equal work, full and equal access to opportunities (meaning, good quality education even in the inner cities and in rural areas), and laws to prevent discrimination in the workplace and in business - including housing.

In theory good. In practice much more difficult with loads of unintended consequences. Tread carefully, go slow and don't forget pilot projects.

I can touch on many more topics, but one thing to remember is that there is nothing sacred about competition per se. Competitiveness is all good and well, but compassion and cooperation have their place too.

The establishment of both parties forgets that part a lot.

http://cfif.org/v/index.php/commentary/56-health-care/3020-obamacares-tax-time-torment

Someone or other quipped that the USA is being run by the Republicrat party. Much of it is being run by people who would rather be bosses than leaders, let alone leaders who research the suggested policies.

BJ & I have been voting the individuals, not the parties, for some time. It takes work, but if enough people do it, we might get more quality, rather than the occasional ones we have at present.

The true advantage of honest capitalism over honest socialism is that when the groups and individuals are uncaring and incompetent, closing them down is automatic. It is not that free enterprise is more efficient as such, it is that survivors have been filtered. Crony capitalism under any name damages this process.

We should have concise & well researched laws, that are actually enforced, rather than wordy, poorly planned ones with the country being run by bureaucrats and imperial edicts, ah that is, presidential edicts.

How can anybody not see that having your employer pay for your medical insurance is insane? It has distorted the entire medical economy to the point where it's almost impossible to get coverage any other way. 0bamacare has made the situation even worse; I just got an extra tax form to prove that I have "compliant" coverage and don't have to pay a $2800 penalty. This year. It also requires 50-year-old men to pay for maternity insurance. On themselves.

Your employer doesn't pay for your house insurance, or your vehicle insurance - which would almost make sense since you need it to get to work. As a result, those insurances are relatively cheap and easy to get - I pay about $800 a year for a car, a work van and a motorcycle - and you don't lose them if you get laid off. If you lose your job, the first thing you have to do is try to get medical insurance in a market where that is almost impossible to do on your own.

The worst thing is that it now mandates what I refer to as "every-scratch-and-sniffle" coverage. Medical insurance must cover EVERYTHING so the patient doesn't pay for ANYTHING. That is just idiotic. Insurance works by spreading the costs of expensive but rare events over a large number of people, very few of which will actually end up having those things happen to them. If you misuse insurance to pay for things that happen to everybody, it just adds overhead and increases cost with no real benefit to anybody. And, by disconnecting those making the decisions from those paying the costs, it practically guarantees that most decisions will be bad ones.
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If a business tries something that doesn't work, they either stop doing it or they will go broke. If the government tries something that doesn't work, they just keep shoveling our money into it forever.