Government spending is not a zero-sum game

[ka9q]

Libertarians Conservatives often argue that the economy government spending is a zero-sum game, and that government spending it necessarily decreases everyone's standard of living.

I strongly disagree; the economy is most definitely NOT a zero sum game. The big variable is productivity. This number drops quite a bit when lots of people are out of

Comments

Re: for serious?

[ka9q]

Okay, I'll concede that I used "laissez faire" in a relative sense, and the regulatory climate has never, ever been "laissez faire" enough to please the true libertarians.

Yet the financial industry *has* become much less regulated in recent years. That's an undeniable fact; all sorts of regulations were repealed starting with Reagan and reaching a fever pitch under Bush Jr.

The libertarians' "zero sum game" argument I was talking about *was* the claim that government spending is a zero sum game. If I worded that too broadly, I apologize. I'd be happy to go back and reword it to say that "Libertarians often argue that government spending is a zero sum game". That doesn't modify my argument at all because I was arguing precisely the opposite: government spending is NOT a zero sum game. It depends entirely on what they spend it ON. A certain government expenditure can increase or decrease economic productivity, or it might have no effect other than to drain a certain amount of money out of the economy. Each case has to be looked at under its own merits.

I argue that one of the largest government expenditures -- defense spending -- works to decrease productivity in addition to being largely a waste of money in its own right, yet conservatives largely have a blind spot about this one. It's as if the money we spend on the military comes out of the aether, not from tax revenues.

Now I'll grant you that neocons and libertarians aren't the same thing. Some libertarians do agree that our defense spending is out of control and that we're involved in far too many wars that have nothing to do with true national defense. But I'm talking about libertarians with a small 'l', i.e., everyone who says they have a libertarian point of view, not the view of the Libertarian Party, and right now that seems to includes a lot of what could also be described as neo-cons. My apologies if I painted with too broad a brush. Maybe I should have said "conservative" instead of "libertarian" in the first place. They overlap, but they're not the same.

But if you do identify as libertarian, then you seem to share with the conservatives the strange notion that the current economic mess is entirely the fault of the federal mortgage companies. No, it's not, and we have abundant empirical evidence that it's not. You could blame it on the corporations who exploited lax regulations, but that would be like blaming bacteria for doing what comes naturally. The blame falls squarely on the government for dismantling the regulations that kept the market stable.

Re: for serious?

[ka9q]

So now, at this point, you've had to basically back off every factual point in your article. Now that you've come that far, it's time to assume that most of your opinions are based on factual points of similar veracity. You've been sold a bill of goods, or maybe you're just surrounded by people who all think alike... either way, if you can learn, you will, if you can't, you won't, so there's not much anyone else can say to you.

But, those of you who can't learn, stop trying to take the money from those of us who can.

Re: for serious?

[ka9q]

I am able to change my views in accord with experience and new evidence. You seem to consider this a weakness or at least a disadvantage. I guess you're entitled to your opinion.

I watched Milton Friedman's TV series "Free to Choose" circa 1980. Do you remember it? I fully bought into his arguments.

To be sure, 30 more years of the drug war have only strengthened Friedman's positions on issues of personal freedom. I'm afraid we'll never get that one right any time soon.

But his positions on financial regulation have not fared as well.

Markets can do wonders IF -- big IF -- their basic assumptions are met. Problem is, they're always met only in a libertarian dreamworld. In the real world, they often aren't. That's the fatal flaw in libertarian economic ideology (and it IS an ideology). SOME amount of government regulation is always needed to keep most markets healthy; they simply won't do it on their own.

Time and again, the ideologues have dismantled regulations claiming that markets can run themselves. Time and again, the results have often been disastrous.

I can understand why you're a little touchy. This economic disaster is the largest in many decades, and it wasn't long in coming after the dismantling of regulations such as the Glass-Steagall Act that had stood for decades.