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Saturday, April 2, 2011
Update on the fight over the budget in Washington
If you like a little politics with your economic theory, read CapitalGainsandgames. A recent entry describes the budget crisis in Washington--they are still playing chicken over shutting down the federal government. The behavior described in the entry is exactly what Smith writes about. People who should know better confuse theory with reality. If reality conflicts with theory, then clearly someone somewhere has regulated something thereby distorting market prices and creating inefficiency. Hence, the answer is always to deregulate, privitize, and let market participants operate out of enlightened self-interest.
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"Hence, the answer is always to deregulate, privatize, and let market participants operate out of enlightened self-interest. " Is this the theory principle? Cause I don't think this works in reality. Isn't that all about what the movie Inside Job is trying to tell us? When we deregulate and privatize, market players take advantage of the market. Who wouldn't? Why not take billions and billions of dollars for personal or corporate gain and then cause a societal and economic meltdown? I have always been more of a "big business" supporter, but lately, I'm starting to realize the destruction that these companies' greed can cause. Lately it even seems like the quality of my clothes and jewelery have just diminished greatly in just a decade as companies look to drive costs down. I think we definitely need to regulate our economy more and control big businesses.
ReplyDeleteReferring to the article, tax cuts are stupid. Yes, they are great for short term growth, getting money back to the people, etc, but in the long run, as seen now, they are detrimental to the economy. Sweden has probably one of the highest tax rates in the world and their average standard of living is well above ours. The media and the republicans want you to believe that taxes are the worst thing in the world. Everyone has this ridiculous attitude toward taxes, like the government is taking something personal from you. If everyone just took the time to understand the role of taxes and how they benefit the individual and society as a whole, then America would be a much better place. With the income left from taxes, instead of spending 90% of your income, maybe the individual could save 20 or 30% and feel a little better about giving up that money for the good of society.
Jumbled thoughts but overall my point is we need to raise taxes for the time being and cut spending, lessen our deficit and control the market players a little more.
"Recent Entry" Link does not work for me...
ReplyDeleteI believe that industries should be regulated to the extent that ethical business practices will be enforced effectively. Regulation beyond that point is inefficient, and regulation below the level allows businesses to take advantage of "loopholes" or inefficiencies.
ReplyDeleteI had no idea that a tax pledge existed, and that most republicans tend to sign the bill.