Small Government?

[leftysergeant]

Hmmm Francesca, that brings up a couple ideas:

How about spending limits based on percentage of GDP?

Then you have Colorado Springs. Government is starved and unable to do anything about a major disaster that impoverishes the masses and leaves a few wealthy nobs sitting above the flood of sewage while the working people drown.

 

[Thunder]

government is just a highly advanced and beaurocratic form of basic human relational structure.

and without structure...you have chaos.

 

[Guybrush Threepwood]

I tend to squirm at how much government outlays have swelled in the UK. Gordon "Prudence" Brown indeed . . .

But your graphs seem to show that the colour of the government has shag all to do with it's size. (At least for the UK and the US which are the only countries I can remember the election results for, and assuming the crystal ball gazing parts are acurate.)

 

[entrope]

To me, small government is merely a government without excessive spending. For example, during the Cold War (1945-1990) ~70,000 nukes were developed at a cost of 5.8 trillion. Is that really necessary? You'd think 1000 nukes is probably enough to wipe out the planer several times, what is the need for seventy thousand? I don't think that small government necessarily means less spending as a percentage of the economy, or provision of less services, but merely the provision of what is needed. If I am to pay taxes, I want my money to be spent wisely. Moreover, I want to receive good quality, reliable services in return.

 

[Cobalt]

To me, small government is merely a government without excessive spending. For example, during the Cold War (1945-1990) ~70,000 nukes were developed at a cost of 5.8 trillion. Is that really necessary? You'd think 1000 nukes is probably enough to wipe out the planer several times, what is the need for seventy thousand? I don't think that small government necessarily means less spending as a percentage of the economy, or provision of less services, but merely the provision of what is needed. If I am to pay taxes, I want my money to be spent wisely. Moreover, I want to receive good quality, reliable services in return.

Welcome to the forums!

I concur with your post, but I feel I should inform you of the sign that says, "Welcome to the Politics section, leave your rational thought at the door."

 

[Thunder]

To me, small government is merely a government without excessive spending. For example, during the Cold War (1945-1990) ~70,000 nukes were developed at a cost of 5.8 trillion. Is that really necessary?

"an unused weapon..is a useless weapon".

 

[Francesca R]

But your graphs seem to show that the colour of the government has shag all to do with it's size. (At least for the UK and the US which are the only countries I can remember the election results for, and assuming the crystal ball gazing parts are acurate.)

I'm not making any statement about the colour of the government, merely that the present UK government have been very heavy spenders since 2000 (They had tied their hands until then as part of their 1997 election manifesto)

 

[Chaos]

government is just a highly advanced and beaurocratic form of basic human relational structure.

and without structure...you have chaos.

Please be so good as to leave me out of it, okay?

 

[corplinx]

They utterly overlook the fact that every time their stupid theory has been put into practice, it has failed miserably.

Friedman's ideas turned Chile, India, China, etc into economic powerhouses and raised millions out of poverty. Your grasp of modern history is weak. If there is one tested and true economic system that works for the greatest number of people, its a free enterprise system. There really is no debate.

As in the great depression, monetary policy had a lot to do with the Iceland crash. Their _government_ created a currency bubble through interest rate manipulation. And when the bottom fell out, it fell hard. And when all the money started leaving the country, the banks fell hard.

Its easier to blame these things on "the free market". Joe Six Pack sees the failed bank. He doesn't understand monetary policy. Its easy to tell him "pay no attention to the man behind the curtain" and deceive him.

There is also a lot of confusion in this thread about the role of the free market in the meltdown here in the US. Let me enlighten you.

0 down loans, interest only, arms, etc were not a function of the free market

The Bush administration with willing sycophants all around shared a dream that home ownership would free minorities from housing projects and slums. It is the sort of thing that sounds great on the surface. When people own for things, they are more likely to be responsible was part of the logic.

However, to make this dream a reality, they had to get the GSEs to underwrite loans for people who could make no down payment. Much like a Milton Friedman documentary, this forks into two unintended consequences.

A. nobody actually owns their homes, they are basically just renting them from their banks, they have zero equity, they aren't even real owners as intended.

B. real estate speculators take advantage of these zero down loans to make fortunes flipping condos/houses in markets like Florida.

The poor get worse off and the wealthier get wealthier. Classic government intervention (like rent controls in the one episode of free to choose). In the end, home ownership was just as low as was before the crisis.

Sadly, government did not learn the lesson. They think the free market failed and must be regulated more. Housing not only must be subsidized with loans guaranteed, but foreclosures must be frozen and prevented. Loans must be modified. The GSEs must be allowed to lose money in perpetuity. That's right, they took the worst of Bush and tripled down on it.

Even Paul Krugman sort of gets it:
http://www.nytimes.com/2008/06/23/opinion/23krugman.html?_r=1

Sort of.

I'm not sure what kind of market you call the one that created the financial crisis, but it isn't a free one.


Milton Friedman said on the topic (ill paraphrase here), "I want a limited government because a big government tends to get taken over by the industrialists". Updating this 30 year old quote for today, we should add "labor bosses" as well.

In a limited government, the big 3 car companies can't lobby congress and impose a 25 percent import tax on south korean made cars, thus screwing the poor people who will still buy them. In a limited government, a window manufacturer can't get government to write regulation making their windows the sole product that meets the regulation. In a limited government, a union couldn't try to get the government to create union shops.

However, in the modern age, all "limited government" means is decreasing federal taxation. The people who use the term don't even understand it as far as I can tell.

 

[GreNME]

I'm not sure what kind of market you call the one that created the financial crisis, but it isn't a free one.

The description would be "an insufficiently-regulated market" for the most part. It was actually a good example for the small government types to point out how it isn't just small governments that can wind up leading to private companies holding the economy hostage while the average wage earner makes less while living costs continue to rise. On the other hand of that, it also gives the "big government" types-- big government in scare quotes because most of the people who would be called that aren't demanding bigger government, but actually demanding greater regulation-- the ability to point out why regulations and requiring private companies to follow such regulations are important. The most frustrating part is that neither bit big-gubmint nor the small-gubmint extremes are going to recognize some of the validity in their counterpart's view and come to an agreement on a moderate-sized government that can shrink or grow when necessary (relative to the economic need), where regulations are in place not only to govern private abuses but also to restrict government from getting too small or too large.

 

[corplinx]

The description would be "an insufficiently-regulated market" for the most part.

And as I have shown, that is incorrect. You had a supply side problem in the lending industry caused by regulation and intervention.

You are in effect blaming the freedom of people to trade securities for the underlying problem. That you cannot see this is disturbing.

 

[corplinx]

When the politicians have convinced you that your _problem_ is too much _freedom_, it is time to re-evaluate your influences.

 

[pgwenthold]

I'm not making any statement about the colour of the government, merely that the present UK government have been very heavy spenders since 2000 (They had tied their hands until then as part of their 1997 election manifesto)

I have a question about those graphs. By using the % of the GDP, that is a relative measure. So how much of the "increase of the size in government" comes from shrinking the GDP? Why is that considered increasing the size of government in the first place? Why wouldn't you use inflation-corrected absolute dollars instead?

Decrease in the GDP does not mean the government is getting bigger.

 

[leftysergeant]

And as I have shown, that is incorrect. You had a supply side problem in the lending industry caused by regulation and intervention.

No. You had an ecconomy that was based almost entirely on the trading of financial instruments that had nothing to do with the production of goods. This was great for the people who were lending the money to buy homes, but it soon left the people who had bought those homes with no way to pay for them.

You are in effect blaming the freedom of people to trade securities for the underlying problem. That you cannot see this is disturbing.

How can it possibly be good for a country to allow people to trade securities secured by nothing?

 

[GreNME]

And as I have shown, that is incorrect. You had a supply side problem in the lending industry caused by regulation and intervention.

Except that's exactly the opposite of what really happened-- regulation had been on the decline since 1999. Enforcement had been down sharply. But that's a whole other economic argument that's going to take the thread on a wild tangent.

You are in effect blaming the freedom of people to trade securities for the underlying problem. That you cannot see this is disturbing.

What's disturbing is conflating "regulation" with "freedom."

When the politicians have convinced you that your _problem_ is too much _freedom_, it is time to re-evaluate your influences.

Has nothing to do with freedom, it has to do with legality.

 

[leftysergeant]

Has nothing to do with freedom, it has to do with legality.

Actually, it has more to do with reality.

Traders are now allowed to trade unreal stuff. A lot of good that does the ecconomy of an industrial nation.

Well, we used to be an industrial nation until the jelly-brain from California convinced us that we could actually get rich trading stuff made elsewhere.

 

[The Fallen Serpent]

Personally I think with measured careful steps globilization of markets is a positive movement. Cross pollination of cultures, ideas, goods and advances. However economies have to integrate carefully in my opinion. There are hiccups, but overall Canada and the US have similar and comparable economies. Not so with Canada or the US with Mexico. As scientific and industrial advances continue I do not see a service based economy being unsustainable. What I see trouble with is too much focus on specific service markets, such as financial services. This appears to lead to a glut of professionals in that sector as other professional service markets suffer.

I do agree we let too much industrialization go overseas. The US has very strong natural resources and properly exploiting that to the benefit of the local economy means keeping industrialization based off these resources close at hand.

 

[GreNME]

Actually, it has more to do with reality.

No, Lefty, it has to do with legality. Your description grossly oversimplifies what was wrong. The FBI isn't investigating dozens of infractions because people were trading "unreal stuff," they're investigating because some people thought they were allowed to do stuff that broke the law. These investigations have been taking place for over two years now, and while it started small (link) and more scrutiny was placed on larger institutions around the initial financial bust (link). Several investigations are ongoing, but I've found scant discussion of them for the last six months on news sources.

So, like I said: it's about legality.

 

[leftysergeant]

Friedman's ideas turned Chile,

into a dysfunctional military dictatorship

India,

Into an electronic sweatshop

China, etc into

a slave-labor camp. Your grasp of modern history is weak.

As in the great depression, monetary policy had a lot to do with the Iceland crash. Their _government_ created a currency bubble through interest rate manipulation. And when the bottom fell out, it fell hard. And when all the money started leaving the country, the banks fell hard.

And the same thing is happening to us. There are no tariffs so our manufacturers can no longer compete with Chinese slave labor. we have to buy weapons components from China now. That is a flood of money leaving the country. But, to build a "buy American" clause into an appropriations bill is "interfering with the free market." The investoir class wins again and the working class loses.

I'm not sure what kind of market you call the one that created the financial crisis, but it isn't a free one.

It was an un-regulated market, created by a dimwit who subscribed fully to laissez-faire capitalism.

Milton Friedman said on the topic (ill paraphrase here), "I want a limited government because a big government tends to get taken over by the industrialists". Updating this 30 year old quote for today, we should add "labor bosses" as well.

Friedman was either a dimbulb or a flim-flam man. With limited government, there is nobody to rein in the greed of the corporatists.

And stop whining about the unions. The unions built the middle class in America as we knew it a scant 30 years ago.

 

[mhaze]

Conservative Republicans in general, and the "Tea Party" crowd as well, go on and on about "small government" being a major goal for their brand of conservatism.

Just what goal do they have in mind? I know that the extreme right, the Libertarian-leaning types, would just as soon have almost none at all. This seems at best a pipe-dream...

What in reality do these folks expect? Most of "government" is pretty well settled by long-established departments and staffed by career bureaucrats. Would all these folks be out on their ear? Since the government is a very large portion of the employment sector, this doesn't seem like a good idea when we have 10% unemployment.......

I don't think that you can support that based on economic theory, but I'd certainly agree that it would sound politically unpalatable.

Moving people from blood sucking leech mode to productive mode expands an economy, increases GNP, increases wealth.

By the way, nobody said a word of concern about the estimated 2M insurance company workers who were understood to be out of work after a single payer takeover. I'd like your opinion, as to why 2M government workers should be given one shred more concern.