Austrian Economics vs. Keynesian Economics in Axis and Allies

Interesting questions
1. To provide a minimal living condition for all people
2. This is similar to 4. This should be that welfare would give you less than a MW job, but still enough to live with.
3. What exactly is wrong with that? I need this clarification before I answer.

I’m saying the Keynesian spending can PROLONG a collapse, not prevent it. I don’t think we should defecit spend all the time, like we do now.

IL saw this and moved it instead of deleting it

@calvinhobbesliker:

Apparently, 50% support welfare, but I’m the only one on AA.org that will defend it? Something is wrong in this picture.

I think this shows my point. Welfare is based on selfishness. People don’t support welfare because they think it is best for the country. They do it because they don’t want their individual benefits taken away. Politicians offer welfare to as many people as possible to buy their votes and then hide (or lie about in the case of Obama) the tax/debt cost of the programs.

So people wont support it because they don’t believe in it. They just want to keep their benefits so they wont oppose it. I assume you support it because you are at that age where school teachers and society has told you that welfare is good and you just believe them, but you haven’t seen the effects (half of your paycheck taken away, or rather half of the money taken away before it makes the paycheck - welfare is all about the secrecy. You don’t show people the real cost).

@reloader-1:

3. How do you prevent politicians from using welfare to buy votes?

@calvinhobbesliker:

3. What exactly is wrong with that? I need this clarification before I answer.

Are you familiar with the cycle of democracy?
http://www.wrisley.com/cycle.htm

Hmmmm……  Quite the discussion.

Kind of enjoyed the video, Taiko

Never ceases to amaze me how much World War II and its after-effects define the world we live in, and how most people seem to already have no clue about WWII, economics (as has been said here) or government…  And yet nearly everyone (in America) can vote…

Oh, and in reference to a previous comment - American voters don’t really pick their candidates either.  They can be involved in helping them get picked, but it is still largely the parties who are guiding/controlling who the candidates will be who appear on the ballot.  And for many races (president, congressman) there are only 2 real choices.  Democrat.  Republican.

Regarding economics - I have a business degree from a US university, so have had at least 3 courses in economics.  Here’s what I took away from my classes (not what was taught, necessarily - but what I concluded):

1.  Economies are so complicated that, really, even the most brilliant economic minds don’t really know what to do.  There are too many effects at the same time, times change, attitudes and public perception changes, etc etc.
(Continued on new post - scrolling issues…)

(Continuation of previous post, thanks to glitch)

2.  You learn some of the most powerful theories of economics in the first week.  In fact, I learned these in my high school class in the first week.  There is no such thing as a free lunch (basically, everything has a cost).  And the laws of supply/demand and how they affect price.

3.  Governments printing more money is a bad thing.

4.  The Federal Reserve is powerful, somewhat unaccountable to government, and is just plain scary.  And see #1 - no one really knows what they’re doing because they don’t really understand the economy.

5.  More economic activity is a good thing (Keynsian, I guess).  When my goverment gave me a check for $1,800 in 2008 for basically being married with 2 kids, I did what they wanted me to and stimulated the economy (hello, 50" flatscreen TV) and boy, am I glad I did.

6.  It’s really hard to make a living with an economics degree other than being a teacher, to teach economics to other poor unsuspecting souls.

7.  Minimum wage and most other government meddling in the natural laws of economics is counter-productive, or bad.  Price fixing (minimum wage) interferes with the beauty of free markets.

Disclaimer - I’m not making points that I’ll argue or justify.  As I said, these were just things I took away from my economics classes

As far as welfare - The US government currently is transferring wealth from some citizens to others (and back) at a staggering rate.  It’s not just welfare.  It’s through taxes, social security, welfare, and many other ways.  It is common for people making $15-$20 per hour, assuming married with kids, to pay $0 federal income tax.  And the crazy thing is, that most people don’t even realize it.  Anyway, apparently the US government is really good at keeping a high-tech razzle dazzle armed forces, and redistributing wealth from one person to another, and putting people in prison.  Oh, and making lots of rules for everyone to live by.

@calvinhobbesliker:

I have a question, wilson. Are you an anarchist?

You take from a post about helping the poor that I am an anarchist? Seriously?  :|

@calvinhobbesliker:

Also, about the gov’t collapsing from debt if they provide HC,

it might work if we scale down are military spending which is larger than the next 14 nations’ combined.
Our gov’t is 13 trillion of dollars in debt, it hasn’t collapsed yet(probably due to Keynesian influences which allow it to defecit spend).

Our military spending is nothing compared to our welfare spending.
Keynesian influences may delay collapse, but they just make the collapse worse (or prolong it and leave us with a huge debt in the case of the new deal)

sigh at the risk of sounding like a conspiracy theorist, here is why the US has not collapsed yet. Normally nations collapse when their debt reaches about 50% of their GDP; Greece was less than that when it collapsed/had the EU take over. Guess how high the US is? The US debt is now over 100% of the US GDP. Why have we not collapsed? Because the rest of the world is buying our debt. Oil, gold, currency exchange (I am not totally sure on the last 2), and many other things are based on the US dollar. If the US economy collapses, oil nations, nations that produce products for the US (like China), and all the nations that already have US debt would be in big trouble (debt is worthless of the currency is worthless). So other nations are basically forced to buy our debt, because if we go down, they are going down. However, it won’t last forever. Eventually, they will stop buying our debt (unless they persist until our debt crashes more than just the US) and unless we have learned to limit our spending, the US economy will collapse. Then China will go, since all the debt they bought off us will be worthless and it will continue like dominoes - a world depression like none other. We may delay it through more Keynesian tactics, but it will happen and the longer it is delayed, the worse it will be. Keynesian economics is like cleaning your room by throwing everything under your bed. Eventually, you will have to clean it, and the longer you wait, the worse it will be.

@ gamerman - I am including social security, medicaid, income tax on a curve, etc. in most of my usage of the word welfare.
As for your flatscreen tv, getting the $1800 is not a good thing. Assuming you are middle class, you will likely have to pay more than that in taxes to pay for giving all those people $1800. Or it is just $1800 * (large fraction of population of US) more debt. That is $1800 of debt that is to be left for your grandchildren to take care of. Imagine telling your grandchild as he gets born, "You were about $10,000 dollars in debt (their portion of the national debt) but now because of this flatscreen, you owe an additional $1800; good luck.

@Wilson2:

As for your flatscreen tv, getting the $1800 is not a good thing. Assuming you are middle class, you will likely have to pay more than that in taxes to pay for giving all those people $1800. Or it is just $1800 * (large fraction of population of US) more debt. That is $1800 of debt that is to be left for your grandchildren to take care of. Imagine telling your grandchild as he gets born, "You were about $10,000 dollars in debt (their portion of the national debt) but now because of this flatscreen, you owe an additional $1800; good luck.

First of all, I had nothing to do with the decision for the gov’t to pay out $1,800 to me.  So there is nothing for me to tell my grandchildren.

Second, did you notice I said an almost middle income family in the US pays ZERO FIT?  Anybody less than middle income is paying negative income tax - they’re collecting from the tax system, rather than paying in (started with Clinton administration, by the way - to whoever said he ran surpluses  :-))  I’ve been a tax accountant for the past 5 years, so I know this for absolute certainty.  It’s public policy like this that leads to major problems.  Why in the world is middle income America paying nearly no income tax?  Not to say they’re (we’re) not taxed!  Typical scenario - 5-6% State income tax, 1-2% FIT, 6% sales tax, 7.65% FICA tax, property tax, vehicle registrations, etc, etc, adds up to maybe 25-30% right there, plus taxes on various services (telecom, etc) we literally get nickel and dimed to death.  But FIT is not a significant part of it, meaning simply that most Americans contribute very little directly to the National Budget.  In fact, around half are taking more than they’re putting in.  So my point is - obviously that does not work.  And it’s not like us American voters are asking for this.  Like Func said, you have 2 choices (2 parties) and neither is really going to fix what’s broken, so we’re all pretty much SOL - because it’s impossible for our votes to change anything.

Wilson - that was some interesting stuff.

What is the total $$ value of US GDP and what is the national debt these days?  By the way, I’m not sure the correlation between those two figures is as strong as you might be suggesting……  As you acknowledged - the US debt has relationships with many other wealthy and powerful nations, so isn’t the same as Greece, or whatever…

Last I checked (but has been a few years), interest on the debt was maybe a third of the national budget.  Some of you brainiacs may disagree, but I think the USA can keep “throwing stuff under the bed” until it can’t make all the interest payments.  Seems to me that’s when it would come to a head…  As long as people buy US T-bills, well, it seems like the ride will continue.

Adults (like us now) were freaking out about the national debt 30 years ago.  It was small back then compared to now…  Not making a point - just throwing that out there…  But as you suggest, Wilson, to compare the national debt as a percentage of GDP (or the annual budget, or whatever other number that quantifies the size of the nation’s government or economy), then if (hypothetically) the USA’s GDP grows by a higher percentage than the national debt, on average, over several future years, than as the national debt actually grows in actual $$'s, it would be becoming less and less of a problem, right?  I mean, I remember thinking about it that way as well, in my college years…

Wow, you guys seem pretty knowledgable.

Everones complaing about our national debt, what if instead of worrying about it we just didnt pay the debt back. See what anybody says about it.

We got tons of nukes, tons of planes, a huge ass navy, marine corp, 82nd and 101st airborne, delta force, navy seals. What is anyone gonna do about it?

Honest question :wink:

@Emperor_Taiki:

Wow, you guys seem pretty knowledgable.

Everones complaing about our national debt, what if instead of worrying about it we just didnt pay the debt back. See what anybody says about it.

We got tons of nukes, tons of planes, a huge a** navy, marine corp, 82nd and 101st airborne, delta force, navy seals. What is anyone gonna do about it?

Honest question :wink:

I’ve wondered about this myself.  Seems you shouldn’t let someone borrow so much money from you if they can take you down.

This is why I never lent my older brother (5 years older than me) any money.  He had to take it from me - I wouldn’t willingly lend it, because if push came to shove, he wouldn’t really HAVE to pay it back at all!!  :lol:

And somebody was wondering on here why we spend so much on “defense”  :lol:  ROFL

Chromwell, have you watched Zeitgist?

@Cromwell_Dude:

….Supposing the statistics on what percentage of middle America pays in taxes is true (I don’t believe it to be true), it only proves Austrian Economics correct.

Oh, it’s true.  Hmm, let me dig out my own 2009 income tax returns.

2009 total income - $55,849
2009 total FIT - $651

I had no special or big deductions.  I did not even itemize.  I have a wife and 2 kids.  Effective FIT rate = 651 / 55,849 = 1.17%

Why would you say you “don’t believe it to be true” when you could gather facts and find what the truth actually is?  :?  Well, anyway - it’s true!  I prepared about 120 income tax returns per year for the last 5 years.  Middle America pays very little FIT.  Lower incomers take more from the government on their income tax return alone, than they put in (not their fault - the government made the rules).

2009 State taxes (Iowa) - $2,156
Effective State rate = 2,156 / 55,849 = 3.86%

So in 2008 when the Federal government sent us a stimulus check for $1,800, they were sending us 3 years worth of taxes.

I’m not making a point - just providing information, which actually backs up some of you guys’ points.  The fact is, middle (and certainly lower-income) America is paying next to nothing into the National Budget by way of income taxes.  This is a fairly big change from 20-40 years ago.  My thought is maybe politicians have figured out that giving tax breaks to the majority of voters gets you voted in and makes you more popular.

And just to prove the ignorance of many people - people clamor for an end to our income tax system and they think a national sales tax is a good idea.  No thank you.  I don’t want to trade my $651 a year in income taxes for a 15-20% added sales tax on everything I buy.  The top 5% of income earners in America pay roughly half of the total individual income taxes per year.  Pretty safe to assume where the national sales tax argument is coming from.  I guess many of the bottom 80-90% of earners who want federal tax reform are too ignorant and/or uneducated to realize that they are cheering for major tax breaks for the rich and major tax hikes for everyone else!  :-o  :-)

@Cromwell_Dude:

Regardless of how you feel about secession, federalism and the federal system died either in 1861 (the war) or 1867 (forcing states to ratify an amendment they rejected, oh yeah, only the Southern states that rejected it, not the Northern ones).   If that’s not good enough for you, then how about these two dates: 1913-the establishment of the Federal Reserve, or 1933-the creation of the Fascist and long-lasting New Deal, and the declaration of the still in effect Martial Law…not good enough, well, then how about 1947-the establishment of the Central Intelligence Agency-the creation of never ending declared wars and a government system needed to complete that war…Even the so-called conservative William F. Buckley described 1947 and the creation of the C.I.A. as a crackdown on civil liberties needed in America…yes, the so-called conservative William F. Buckley.   Did I mention he was a ‘one-time’ agent of the C.I.A.?   And subsequent presidents claimed (they can be trusted right) his magagine, The National Review, was a C.I.A. front…my point?   Just as much as people have been deceived into thinking we live under a ‘federal system,’ the same people believe the Federal Reserve is a ‘federal’ entity that protects us ‘dumb’ Americans.   Question: HAVE YOU EVER READ ABOUT WHAT THE PEOPLE WHO CREATED THE FEDERAL RESERVE ACT SAID ON RECORD ABOUT IT, ONCE IT PASSED CONGRESS???   You talk about primary sources!!!   The truth is right in front of people and they don’t even care.   What’s scarier, what they said about its true intent after it passed or us Americans who are too lazy to care?..If you think this is all intellectual bitter batter, how’s the economy, how’s the prices of goods and services, how’s the security of your job, how’s those never ending foreign wars going, how’s your civil liberties, if you died tonight would you feel safe leaving your children in this America?   Think a history lesson of the Federal Reserve System might be important?

And dont forget how Mossad was behind 9/11.(sarcastic)

I hear people make these same points and they seem pretty reasonable, but usually the next thing they say is somthing about 9/11 being done by the jews or the government. Or something about zionism.

Even Ron Paul pretty much admits he is a 9/11 troofer
http://www.youtube.com/watch?v=88x6JdfjwCY&feature=related

I am not saying these arnt good points, I am just saying alot of people who also make these points are crazy.

and what do you mean marshal law is still in effect?

@calvinhobbesliker:

What’s PSOE and PP stand for(and English translations, please)

Yeah, the Lib Dems were key in the UK. However, what’s to prevent a 3rd party from taking bribes?

PSOE -> Partido Socialista Obrero Español (Socialist Workers Spanish Party, but there is not much socialist or workers in their politics lately)

PP -> Partido Popular (People’s Party). Right Wing party, but I don’t know why they put Popular in their name  :-P

You have reason, a 3rd party still can take bribes. The key is voting for a party that promises changing the election system to open lists and matemathic proportionality, changing the system. LDs in UK seem that are going to manage changing the system a bit … maybe we must do this step by step I guess

@Wilson2:

@calvinhobbesliker:

I have a question, wilson. Are you an anarchist?

You take from a post about helping the poor that I am an anarchist? Seriously?  :|

Maybe. There are 2 types of anarchists: anarch-sindicalists (left wing) and anarch-liberals (right wing). I think that we are approaching slowly to a anarch-liberal society without having much chance of changing it

yep too political here… locked