Economics Questions

Re: A Laissez-Faire 180

Caley McKibbin — Sat, 11 Sep 2010 20:12:10 GMT

4.06% of GDP (2005 est.)

That is about 12% of the budget if you multiply by the fraction of GDP/Spending.

Re: A Laissez-Faire 180

David Sherin — Sat, 11 Sep 2010 19:56:39 GMT

Defense is around 50% of discretionary spending, but then there's mandatory spending (thing like SS and medicare/medicaid) which make up a greater portion of the total budget. I'm sure you could google "federal budget" and see how it breaks down. Whether or not the numbers are accurate is another question.

Re: A Laissez-Faire 180

cognitivist — Sat, 11 Sep 2010 10:23:22 GMT

Something like what I'm describing would be like using the credit card, but just for welfare. I also advocate mostly doing away with welfare during periods of economic prosperity.

Re: A Laissez-Faire 180

cognitivist — Sat, 11 Sep 2010 03:49:58 GMT

Smiling Dave:
Just to a lot of people.

I still don't see how reallocating the current expenditures, inflation-adjusted, to expand the welfare programs would result in food and energy prices going up. If I assume correctly, welfare is subsistance living compared to your lower quartile private-sector real wages. And 7.30 isn't a very good living wage, even. If anything, demand would drop because of more people having to spend even less than before and the government borrowing the money but not raising taxes to put people in the welfare system who are currently unemployed or underemployed even. I thought Austrians mostly assumed that pulling regulations out of the market would cause it to bounce back fairly quickly, at least in comparison to economies that feature heavy interventionism as the route to revival.

Re: A Laissez-Faire 180

Smiling Dave — Fri, 10 Sep 2010 22:35:47 GMT

double post

Re: A Laissez-Faire 180

Laotzu del Zinn — Fri, 10 Sep 2010 21:49:33 GMT

I wonder what that site is including in "other welfare programs"

Re: A Laissez-Faire 180

BrianAnderson — Fri, 10 Sep 2010 21:46:02 GMT

I realize that seems like a legitimate site, but how is that possible? Don't we use over 50% of the budget for national defense?

Re: A Laissez-Faire 180

Smiling Dave — Fri, 10 Sep 2010 19:52:52 GMT

It's certainly true that not only poor people eat. But you don't have to give free money to everyone who eats to make the price of food go up. Just to a lot of people.

"The total cost of all federal assistance programs -- including Social Security, Medicare, Medicaid, and various welfare programs -- accounts for nearly one-half of all money spent by the federal government." That's from http://usa.usembassy.de/society-socialsecurity.htm

Well!

Re: A Laissez-Faire 180

cognitivist — Fri, 10 Sep 2010 19:45:30 GMT

How does inflating the welfare recipient's money supply drive up food costs? The food is a market-wide good not specific to the welfare system...

Re: A Laissez-Faire 180

Smiling Dave — Fri, 10 Sep 2010 14:43:58 GMT

If you "pour stimulus money into unemployment and welfare" that means you have inflated the prices of those good the unemployed and the poor need most. Because you are giving them the money to spend on their needs, but have not increased the actual supply of their needs. Giving out welfare checks does not make food grow etc.

So it's saying "Before the gov't gets out of the way as it should, let's have it give one last gift to the poor: an uneccesary doubling of food, clothing, housing and and energy prices."

Re: A Laissez-Faire 180

hugolp — Fri, 10 Sep 2010 11:19:26 GMT

Oh, okay. I agree with that. I wasn't sure if the question was whether or not to use the stimulus package at all. If we're forced to, I agree with you.

Well, it was saying even more. Maybe we should use it even if there was no obligation during a supposed transition to a libertarian society. If you suddenly stop the malfare state (also known as wellfare state), people will have problems. The transition wont be easy and without savings because of the corporatist/mercantilist/socialist policies (you pick the name) the poor people will suffer. So its not that crazy to propose some kind of temporal social sytem during the transition. Being realistic, I am not advocating the policy.

Re: A Laissez-Faire 180

BrianAnderson — Fri, 10 Sep 2010 11:06:58 GMT

It certainly is a better option than using that money to save GS and JPM or hiring the politician's friend company to build roads to nowhere.

Oh, okay. I agree with that. I wasn't sure if the question was whether or not to use the stimulus package at all. If we're forced to, I agree with you.

Re: A Laissez-Faire 180

hugolp — Fri, 10 Sep 2010 10:04:17 GMT

How would pouring Federal Reserve notes into unemployment and welfare be lettingthe market perform without crutches?

It certainly is a better option than using that money to save GS and JPM or hiring the politician's friend company to build roads to nowhere.

At the end, in a market system the people is supposed to be able to save so we can go through unemployment or other bad periods. But the inflationary policies prevented the normal formation of savings while promoting consumption and debt. It is not totally crazy to grant some protection to the people that did not save so they can go through the correction. The situation is how it is.

Re: A Laissez-Faire 180

BrianAnderson — Fri, 10 Sep 2010 09:52:02 GMT

How would pouring Federal Reserve notes into unemployment and welfare be lettingthe market perform without crutches?

A Laissez-Faire 180

cognitivist — Fri, 10 Sep 2010 09:46:29 GMT

What if a new set of leaders turned around, pulled regulations out of the market, poured the stimulus money into unemployment and welfare, and let the market perform as it would otherwise without crutches? What would our economic environment look like?