RoR: Forum

John, we are in agreement. This is getting quite frustrating. You are now making many accusations that aren't at all true. Perhaps because your view is so one-sided, you assume my view is as well.

I said repeatedly that the tradeoff will be between tax increases or spending cuts. You first tried to deny that spending cuts were spending cuts, and then you suggested that the voters are eager for spending cuts, and now you're saying that I'm only focused on spending cuts! I've been talking about them because you keep trying to ignore them and how significant the political cost is. As I've said, I don't know how it'll work. Yes, the easy solution of borrowing and evading is gone, so now there's two options. The spending cuts will be just as hard. I don't expect much to change there. And as I've mentioned, the tax increases might become easier because a balanced budget requires some kind of action, and at least one of the parties actually likes tax increases, as long as the blame is spread around.

You started by asking whether it was better to have deficit spending or force them to face the reality of tax increases through a balanced budget. My answer was that it depends on how all of this actually works. If tax increases become easier, spending might increase as opposed to the libertarian dream that this will force spending to go down. Did I say it will definitely go up? No. And the details of any plan will make a big difference. But fantasizing about how it should work, and how the amendment should be written, and how the population should view spending cuts are not addressing any of my points.

Well that's the point Joe, it's not now because another mechanism is available, borrowing. If you took that out of the equation, you assume the tendency would just be to raise taxes instead of cutting. And I don't think you're right. It would be a different paradigm.

As I said, that was never my assumption. But pretending this isn't a possibility is just wishful thinking. Sure, it'd be great if passing an amendment would suddenly create responsible behavior.

The entire Obamacare legislation, which was a future spending obligation, cost the Democrats politically so dearly that they lost the House of Representatives. Ignoring this I believe is not taking this issue seriously.

The future spending obligation has little to do with this. The spending was put off so it could look like it was cost saving. It wasn't unpopular because the spending was delayed. It was unpopular because the spending was wasteful and the program coercive. If it had started immediately, it would have still been unpopular. I'm not sure why you keep bring up this example with regards to future spending. What do you think it proves?

This is annoying and obnoxious. It's a strawman to say I'm saying it would be 'easy' or 'popular'

First you said that spending cuts weren't spending cuts to deny my point that there is a political cost. Then you said my view of the populace is wrong and they are really in favor of spending cuts, presumably to once again show that of the two options (spending cuts or tax increases), spending cuts will be easier. I'm not sure how this is a strawman, except that you might disagree with the degree. You are the one trying to negate my point that spending cuts are hard by making unrealistic assumptions that minimize the difficulty.

I don't why you ignore this reality and think borrowing itself doesn't lead to the eventual necessity of either raising taxes or cut spending.

Perhaps this is the reason for the disagreement. You have some weird idea that there are only two possible positions. One is those who don't want the balanced budget because they think deficit spending is free. The other is your own position that the amendment will get rid of that and will consequently reduce spending. You accuse me of the first position, and by implication that I'm stupid or evil. There are in fact many different positions that could be taken, including:

1.) For the balanced budget, even though it will probably exchange tax increase for deficit-spending and not actually reduce spending.
2.) Against the balanced budget because such an amendment will not reduce spending but will make it politically easier to raise taxes.
3.) Against the balanced budget because while in theory it could work, the expected version that gets passed will have serious flaws that make things worse.

Pretending there are only two positions lets you put a lot of words in my mouth. It also means you have to make unsupportable assumptions to justify your hope that spending will be reduced. And that's how I see this discussion. You are making wild assumptions and ignoring other possibilities, while assuming that I must believe the exact opposite.

This is what I mean by talking past each other. You quote me "we shouldn't care what they think" and then attribute this quote as meaning that politicians should not care what their voters think, when actually I was referencing the mainstream media, not the voters.

I don’t appreciate nor find any value in a discussion where previous points are brushed aside, or its meaning twisted, or not considered 'serious' (a form of intimidation) for fear of either conceding the point or acknowledging one’s own inaccurate statement.

I could borrow the last sentence. Remember that I was arguing against your idea that spending cuts aren't spending cuts by pointing out that others will see right through your verbal tricks. You then took my comment out of context, pretended I was making some kind of ridiculous claim that we have to have the approval of the mainstream media. Do you really think so low of me that you'd assume I thought that? Instead of accepting my point that spending cuts are spending cuts, you made laughable accusations, twisted the meaning, and ignored the context, all "for fear of either conceding the point or acknowledging one's own inaccurate statement".

Post 41

Sunday, August 7, 2011 - 9:55pm

Since there has been so much distortion through this thread, let me review many of my points through this thread:

1.) The idea that spending and funding decisions will be made together is a false assumption.
2.) That means the assumption that spending increases will be limited by the fear of tax increases is questionable.
3.) The balanced budget only affects current spending, not future spending.
4.) Future spending is likely to continue since it has political benefits and that budget doesn't need to be balanced until the money is actually spent.
5.) Current spending trends will likely be converted to future spending, so they can separate spending and funding more.
6.) When future spending events arrive, they will be viewed as existing obligations. Reducing them at that point will be considered a spending cut.
7.) An amendment that tried to get rid of future spending is unlikely to pass because of entitlements.
8.) Even if you could get rid of future spending, people will still recognize spending cuts.
9.) Spending cuts are politically costly, and will almost certainly continue to be.
10.) Historically, spending cuts are very difficult to achieve.
11.) The political cost of a tax increase is significantly reduced when the action is bipartisan.
12.) The balanced budget might force bipartisan tax increases.
13.) There may be a yearly crisis to balance the budget.
14.) Extravagant spending may occur early in the year where there is money, and at the end when there isn't much left, key programs might be used as leverage to force tax increases.
15.) The details of the balanced budget amendment will make a big difference. It can create a lot of problems, and make some problems worse.
16.) Any loopholes in the balanced budget amendment, such as military funding in time of war, will likely shift all military spending to be deficit-spending, freeing up all taxes collected for other spending.
17.) To pass the amendment, it may have to appeal to those who favor tax increases over spending cuts. The final wording will almost certainly not favor the libertarian perspective.

Post 42

Sunday, August 7, 2011 - 11:45pm

Joe, the fact you keep bringing up spending cuts and the political cost of it, while ignoring what the associated costs are of borrowing indefinitely with the eventual consequence of either a spending cut or a tax increase (or hyperinflation) just gives me all that much more confidence that my position is correct, and that you can't rationally defend against a balanced budget amendment. You recently put up a quote about rationality, how it's about weighing one thing against the other, but here you are not weighing one thing against the other, maybe because you didn't fully think this issue through, and you can't deal with me challenging your obvious lack of weighing one thing against the other. I don't know, but instead, you seem to only be interested in scoring debating points at this point rather than come to some mutual understanding on the topic. How unfortunate.

You first tried to deny that spending cuts were spending cuts

WRONG. I never said spending cuts were not spending cuts, do you think I'm that stupid to think that? You said people may view eliminating a future spending obligation as a spending cut (and you brought up the mainstream media), fine, but that's besides the point and simply a semantics game that is irrelevant to the positive/negative points of a balanced budget amendment and the obvious negative consequences of deficit spending. The mainstream media is biased towards socialism, so any spending cut, spending cap, eliminating or reducing a future spending obligation, whatever, is going to be trashed by them. It seems to me what you are really saying is Capitalism in this country is a lost cause, and that we should just always expect the size of government to continuously increase until it takes over 100% of GDP. There's no other option but to sit back and wait for the eventual economic collapse of the United States.

then you suggested that the voters are eager for spending cuts,

They appear to be more willing to accept them, yes. The polls indicate as such. I'm not going to keep debating this point. You can certainly put whatever words in my mouth if you want like 'eager', and make it sound like I'm this moronic optimist that thinks everyone turned into a libertarian, but this is obnoxious, so I'd prefer you stick with the words I choose and not be so insulting.

now you're saying that I'm only focused on spending cuts!

Well you certainly seem to be, to the point of ignoring all the instances I've brought up where tax increases were viewed negatively (care to address any of these instances or continue to ignore them?). And you ignore the fact deficit spending, which is far easier than raising current taxes, is a tax increase! You can say I'm ignoring the political costs of spending cuts all you want, but you seem to be unwilling to acknowledge that there are plenty of instances to point to that tax increases were just as politically costly. I was trying to get you to understand that there are political costs to both, I'm not ignoring that there is no political cost whatsoever to spending cuts and I acknowledge it, but that's not my point, my point is you shouldn't only be concerned with one side of that political cost while ignoring the other, or at least downplaying or pretending it's not much of a cost, or that deficit spending itself isn't a far more insidious tax increase that is quite easy right now to do, i.e. you should follow your own advice and weigh one thing against the other.

Yes, the easy solution of borrowing and evading is gone, so now there's two options. The spending cuts will be just as hard. I don't expect much to change there. And as I've mentioned, the tax increases might become easier because a balanced budget requires some kind of action,

You keep evading the fact right now borrowing means a tax increase. How could it be any 'easier' to increase taxes when that is an eventuality anyways right now with no balanced budget and deficit spending? They always have been increasing our taxes whenever they run a deficit. It's too easy right now. Why is this lost on you? You're a very intelligent person and you should be able to easily make that connection.

The future spending obligation has little to do with this. The spending was put off so it could look like it was cost saving. It wasn't unpopular because the spending was delayed. It was unpopular because the spending was wasteful and the program coercive. If it had started immediately, it would have still been unpopular. I'm not sure why you keep bring up this example with regards to future spending. What do you think it proves?

What do you think it proves? That it's possible for a spending program to be unpopular, which you seem to think all spending programs will always be popular with the electorate. You're way off base to assume this. Sure, government spending can be popular, but that's not always the case, and that's all the point I was trying to make. You seem to think there is never any backlash against government spending, which is absurd, a political party just lost power in the last election because of it, don't tell me there is no political cost to it.

Perhaps this is the reason for the disagreement. You have some weird idea that there are only two possible positions. One is those who don't want the balanced budget because they think deficit spending is free. The other is your own position that the amendment will get rid of that and will consequently reduce spending. You accuse me of the first position, and by implication that I'm stupid or evil.

Accuse you of being evil? I do think you're an intelligent person but maybe in this instance a little stubborn and perhaps not making an obvious connection. I'm accusing you of evading what the consequences are of deficit spending, which is obvious when you are worried about tax increases with the amendment, when that is essentially what deficit spending is right now, which is a tax increase. What exactly are you worried about then? Deficit spending is a tax increase. As long as you can't make that connection I can understand your worrying about spending cuts being too much of a political cost, because you don't see how we already are dealing with tax increases when the spending obligations are paid for with future taxes or inflation.

1.) For the balanced budget, even though it will probably exchange tax increase for deficit-spending and not actually reduce spending.

Wow, after all that we're back to very first post I made to you: "but isn't it better to force the issue of paying for spending now by increasing taxes to cover it, than it is to simply increase spending and pay for it with debt, and divert those tax increases into the future, which would mean even more spending in the form of interest on the debt which means an even bigger future tax increase?"

This wouldn't be a 'wash', it would mean no longer paying interest on debt. This is part of my frustration, it almost seems you are deliberating not trying to understand my posts.

You then took my comment out of context, pretended I was making some kind of ridiculous claim that we have to have the approval of the mainstream media.

Well you implied that politicians do. I don't care if you refuse to acknowledge your own points, it just makes you look all the more ridiculous for backpedaling on what you said.

You've done this before with the marriage debate some months back when you claimed marriage must lead to unhappiness and was thus objectively a dis-value, and then when I challenged you on this, you backpedaled and claimed you never made such an accusation, and then demanded I justify to you why there was any value to marriage. You bring down the quality of these boards when you act this way and I don't see it as anything but arrogant posturing. Run your site however you want, but the tone of your posts is off-putting and making it less pleasurable to post here.
(Edited by John Armaos on 8/08, 12:41am)

Post 43

Monday, August 8, 2011 - 12:11am

Your post 41 doesn't even attempt to weigh the consequences of our current paradigm of deficit spending, and it makes a lot of speculative assumptions on what politicians would do. Taking a cue from you Joe, am I supposed to take that seriously? What happened to weighing one option against the other?

Well here, let me try to do this (again) in less than 17 points.

1)Historically there hasn't been much of a political cost at all to deficit spending.
2)Deficit spending is a future tax increase.
3)Because there is little political cost to deficit spending, there isn't much of an incentive to prevent these future tax increases
4)Current tax increases are viewed negatively, by some, positively by others, meaning there is to a certain degree an associated political cost to a current tax increase, a cost that is much higher than deficit spending/future tax increases
5)Since the political cost of current tax increases outweighs deficit spending/future tax increases, a balanced budget amendment would remove the more tax costly/less political costly option of deficit spending.
6) Therefore overall, there would be a net decrease to overall tax burdens.

But, as I said before, I can certainly see how a balanced budget amendment is worded to the point it is rendered irrelevant, as in the congress would weasel their way out of balancing a budget and find some interpretation that let's them get out of following it. It's certainly been the case on the state level, but I'm not that familiar with how they work in all of the states. Some certainly to be in better shape than others. And those that are have balanced budgets.

(Edited by John Armaos on 8/08, 12:44am)

Post 44

Monday, August 8, 2011 - 1:31am

John, I'm starting to see a trend with your posts. Bringing up the marriage thread shed some light on it because it's the same issue. In that thread, I pointed out how certain aspects of marriage can lead to a bad relationship. I pointed out how certain incentives are created, for instance. If those aspects didn't exist, they wouldn't have those effects. You and others tried to prove me wrong by imagining a relationship that you would call marriage but didn't have those elements. Presto! Some kind of proof that 'marriage' isn't bad! But imagining a different kind of relationship that avoided the particular pitfalls that I mentioned does not prove me wrong. It proves my point. You had to change the nature of the relationship, while keeping the same name.

Now the obvious explanation is that you are wedded to a particular belief and must distort the discussion in order to defend it. I think that's clearly happening in both examples. But even your approach is the same.

In both cases, I pointed out causal relationships that can lead to negative results. Now you could simply accept these points as true, and still claim that overall the good outweighs the bad. You could suggest that while there might be such tendencies, you think other factors will be more important. Or you could even argue that the causal connection isn't quite correct. But instead, your first reaction is to try to define away the problem. With marriage, you imagined a kind of relationship far different from normal, but still called marriage. For the balanced budget, you tried to define away spending cuts, or suggest that the electorate now favors them.

When I point out that you can't just define your problems away, you then accuse me of taking the equally irrational opposite view that you hold. You say that I think marriage is bad, no matter what the nature of it is (as if the word itself were inherently evil!). And you say that I think deficit-spending is good. Neither is remotely accurate.

Now perhaps you aren't intentionally distorting things. Maybe you really can only think in terms of either-or, so if I don't agree wholeheartedly with you, I must want the opposite. Despite my posts to the contrary. Like post 22 that says "John, I don't like government borrowing either. I was just trying to point out that a balanced budget amendment might not have the desired effect that we might assume." Or how about post 24: "John, I understand your point that deficit/debts are simply a form of taxation, and in many ways a worse form." Clearly what I've actually said doesn't register. You seem to think you can deduce what I think by the fact that I haven't agreed with you. If it's not one side of a false dichotomy, it must be the other?

You mentioned my post about needing to weigh one option against another. But to do that, you need to be careful about identifying what each option is. You can't just pick a side and then choose assumptions that support it. So what I've done is point out how many assumptions about how it might work are fanciful, unlikely, or mistaken. My point in posting in the first place was in response to Merlin's humorous post 7, about how any one who would oppose such an amendment is a terrorist. I've read other writers who favor free markets express legitimate concern over a balanced budget amendment not having the effects that people are expecting.

Weighing options means clearly identifying them and judging them based on the actual results. Creating a false dichotomy, ignoring details, and picking a side is the exact opposite of that approach.

As for the mainstream media bit that you keep talking about, I find your dishonesty crude and revolting. My original quote, with more context:

You say that spending shouldn't be automatic and each annual budget has to be voted on, but do you really think that reducing the payouts for these entitlements wouldn't be considered a cut? As the spending is being debated, do you think politicians are going to pretend that they aren't really reducing benefits because spending shouldn't be automatic? Would the mainstream media go along?

The point I was making was that reducing entitlement payouts would be considered a spending cut, with all of the political costs associated with it. I asked you if you really thought it wouldn't be considered a cut. I then asked if politicians would pretend that it wasn't really a cut. The answer should be obvious. They'd never get away with. Everyone would recognize it as a spending cut. And finally, I followed up by picking the mainstream media as an example of another group that wouldn't pretend. How you read that and think I mean that we should seek mainstream media approval is beyond me. Your quote "Well if we're going to wait around for what satisfies the mainstream media we don't deserve a country". Really? You think that was the point of that paragraph? The first sentences, and the entire context, have nothing to do with it? You think I stopped in the middle of a post to declare that we can't move ahead without their buy in?

Instead of simply admitting that you misunderstood me, even after I clarified more than once, you have pretended that I secretly meant that "We should wait around for what satisfies the mainstream media". And then you go to lecture me about refusing to back down from an absurd point in the name of winning an argument. The absurdity started and ended with you! Ignoring your preposterous accusations was an attempt to move on with the real debate. But clearly you want to shift the focus away from the balanced budget to a debate over whether we have to wait around for the mainstream media.

Post 45

Monday, August 8, 2011 - 2:42am

John, post 43 was insulting, but at least you presented a real argument in there. The argument has problems, though.

The biggest problem is the conclusion.

Therefore overall, there would be a net decrease to overall tax burdens.

First, you present it like the conclusion of a proof, which isn't what I meant by weighing two options. It's still dichotomous thinking. One side is bad, the other side is better. No tradeoffs necessary. There's no costs to the benefit. It's all good. So your suggestions that I don't weigh options is not just wrong, it's hypocritical. Real tradeoffs means giving up something of value for something of more value. You have to choose which are more important cause you can't have it all. The way you presented this, it sounds like you think that you can have it all!

More importantly, the conclusion is unwarranted. You assume that deficit spending will simply be replaced by increased taxes, and not having to pay interest makes it better. But you've forgotten an assumption that I pointed out in my first response to you. You assume that all else stays the same. You assume the spending side of the equation doesn't change. You've taken a snapshot of the world, and replaced deficits with tax increases. But the world moves on. To favor the amendment, you have to also anticipate what affect it will have on future spending. You might assume that it will reduce spending, because people don't want to pay taxes. That could be true. As you mentioned, the political cost of tax increases is currently higher than the political cost of deficit spending. That's a strong argument. But it isn't one-sided. The balanced budget amendment may also reduce the political cost of tax increases, as I've mentioned. How much will it decrease? I don't know. And that's why weighing options is not the trivial task you make it out to be. We may know the likely effects, but the magnitude of those effects are impossible to predict. Whether you dismissed this potential tradeoff or have ignored the dynamic consequences (how spending will change in the future) is hard to say.

There's another problem with your conclusion. The tax burdens in each case aren't easily compared. You are trying to compare them based on raw dollars. If you borrow, you have to pay it back plus interest, so it is a higher tax burden. But a dollar today is not the same as a dollar tomorrow. Generally, it's worth more. A common argument that utilizes this point is that by borrowing money now, we can pay it back later when we are wealthier and it will be less of a burden. This might be true, depending on the interest rate vs. the growth rate. Certainly during a normal depression it is widely expected that there will be significant growth during the recovery. Borrowing might end up with a smaller real burden, even if the total dollars is more. So even if the rest of your assumptions were true, this conclusions would be unfounded.

It is difficult to weigh options when degrees are unknown, but I personally would expect that the effects on future spending and tax rates would end up being much more significant than the dollar vs. dollar comparison of tax burdens, even if that was an accurate comparison. The strongest argument (again...by my weighing of the factors) for the balanced budget is that increasing spending may become more difficult if the cost is felt immediately. If this was the expected consequence, I think it would dwarf the other effects. It might be worth it even if we found that borrowing was a smaller real burden than immediate tax increases. The problem as I said is that the details matter and it could end up with unintended consequences. I can't say that I'm in favor of something without knowing what it actually does. I would like a balanced budget, but I'm not in favor of anything that happens to have that name.

Those are the biggest problems I see with your reasoning. I'd also like to mention point 4.

4)Current tax increases are viewed negatively, by some, positively by others, meaning there is to a certain degree an associated political cost to a current tax increase, a cost that is much higher than deficit spending/future tax increases

This is slightly more complicated than you make it out to be. As I've mentioned, the biggest cost occurs when one party is responsible for the tax increase. Bipartisan tax increases will likely lower the cost. The cost is also uneven, since Democrats tend to favor tax increases more than Republicans. A tax increase by the Democrats will offend some of their constituents, while a tax increase by Republicans will offend many more. Bipartisan tax increases will hurt Republicans more than Democrats. Also the Republicans are fond of promising no tax increases and smaller government, so they will probably get hurt more for violating their pledges. They might end up with most of the blame, even in a bipartisan agreement. So you have to also discuss the cost to who, and under what condition. A bipartisan tax increase might be less costly for a Democrat than partisan deficit spending is.

This complexity creates potential unintended effects. If Republicans are blamed more often, they may lose to Democrats, who then spend like mad. Or the amendment might be written to favor bipartisan tax increases. Or the Democrats might just refuse to cut spending and the Republicans have to choose between cutting spending unilaterally (also more costly then bipartisan cuts), or a bipartisan increase of taxes. Or any number of other possibilities might occur. It is difficult to weigh the possibilities since so many things are changed.

It's fine to me if you say that these are risks, but you prefer taking a chance because the current system is so broken. It's fine to think that some of the consequences will outweigh the others. In most complicated policy choices, you have to make judgment calls without enough information. I said the same thing during the Iraq war. There are costs and benefits, and you have to make tradeoffs based on uncertain information. I was called a supporter of the war because the people opposed to the war kept trying to ignore the costs and benefits. Instead, they tried to claim that one side is absolutely, unequivocally correct, and the other side is immoral. And they had to rely on terrible reasoning and bad assumptions. When I pointed them out, they assumed I was just as unequivocally for the war. That's a bad assumption.

In this discussion, I've simply tried to point out that many of the assumptions about how it will work out are fanciful, and that there is a possibility of unexpected costs that could end up dominating the consequences. Everyone has to form their own judgments about how significant those points are. Weighing the options means recognizing that tradeoffs and risks exist, and making as good of a judgment as you can on how the two sides stack up. There is room for disagreement there. The biggest flaw to the dichotomous thinking is to trying to change the terms of the debate with assumptions or accusations so that one side is absolutely, in every respect, better than the other. Once that becomes the goal, reason becomes rationalization and discussions stop seeking the truth.

Post 46

Monday, August 8, 2011 - 6:35am

Joe:

John, I'm starting to see a trend with your posts. Bringing up the marriage thread shed some light on it because it's the same issue. In that thread, I pointed out how certain aspects of marriage can lead to a bad relationship. I pointed out how certain incentives are created, for instance. If those aspects didn't exist, they wouldn't have those effects. You and others tried to prove me wrong by imagining a relationship that you would call marriage but didn't have those elements. Presto! Some kind of proof that 'marriage' isn't bad! But imagining a different kind of relationship that avoided the particular pitfalls that I mentioned does not prove me wrong. It proves my point. You had to change the nature of the relationship, while keeping the same name.

I am noticing a trend in your posts as well. Do you think Joe what really is happening is that you place your own preconceived arbitrary aspects on marriage that you arrogantly presume applies to all married couples, when you are challenged to defend that this is actually the reality, or at least applicable to everyone, you simply don't bother defending that, you demand that someone come up with a reason why these negative aspects are actually good. You box the argument into your all encompassing definition that you think isn't subject to scrutiny. It's apparent to me now, you just artificially design the argument and then arrogantly dismiss others for not accepting your design. How could anyone argue against something negative? They can't, so you declare victory, nevermind that your opponent is challenging the nature of the assumptions you make. Well you don't get to act like I'm the irrational one here, it's clear you don't like being challenged on the design of your argument.

Now the obvious explanation is that you are wedded to a particular belief and must distort the discussion in order to defend it. I think that's clearly happening in both examples. But even your approach is the same.

Likewise, your approach is the same, fixate on a negative aspect, say that this applies to all situations, demand and even bully your opponent he accept this without further question, don't bother considering any positive aspects, and then demand the other person explain why these negative aspects aren't negative. I'd say you certainly are guilty of wedding yourself to a belief you must distort the discussion in order to defend it.

Weighing options means clearly identifying them and judging them based on the actual results.

Of course, you act like I'm not doing that and lecturing me on what rationality is. Give me a break! But you imagine these particular sets of results and act as if there could never be any flaws to them, and you don't rationally weigh them against the alternative. You say tax increases would be easier with a balanced budget amendment, but you don't weigh that against a worse form of taxation that is a higher burden, that being deficit spending. You say there is a political cost to increasing spending, but you don't weigh that against actual examples of the political cost of spending increases that can occur, nor weigh that against the political costs of raising taxes. To you, it's simple, none of that compares to your artificially designed argument, that this political cost of spending increases is so low it couldn't matter what the political costs of the alternatives are. You've yet to justify this at all, and ignore all of the real world counter-examples I give you. There's no rationality here with you. There's only this is my ball, and you don't get to bring yours, and if you don't like it than your some kind of idiot and should go home.

I'm not going to keep playing that game with you.

As for the mainstream media bit that you keep talking about, I find your dishonesty crude and revolting.

Oh give me a break, you've been guilty of continuously distorting my views, claiming that I said consequences don't matter, that I said spending cuts aren't spending cuts, that I said politicians shouldn't care what their voters think, none of which was remotely true. I could also say these examples are instances of your crude and revolting dishonesty.

The point I was making was that reducing entitlement payouts would be considered a spending cut, with all of the political costs associated with it. I asked you if you really thought it wouldn't be considered a cut. I then asked if politicians would pretend that it wasn't really a cut. The answer should be obvious. They'd never get away with. Everyone would recognize it as a spending cut. And finally, I followed up by picking the mainstream media as an example of another group that wouldn't pretend.

I see now, so the bit about the mainstream media recognizing something as a spending cut was just superfluous and unnecessary to your argument. Point being people would see it as a spending cut, and those people would be the voters. I think I see the confusion, there was no reason to even mention the mainstream media at all, it was irrelevant, we both agree that what's really important is what the voters think, but for some reason you added this group that bears no consequence on the political costs of passing a spending cut, and then when I challenge the relevancy of the mainstream media, you distort this into meaning I think the politicians shouldn't care what the voters think, and yet blame me for distorting your views, what nerve! There was no reason to even bring it up, because again, it doesn't matter what the mainstream media says, it matters what the voters think, the mainstream media is an irrelevant group to consider when talking about political consequences.

(Edited by John Armaos on 8/08, 10:31am)

Post 47

Monday, August 8, 2011 - 6:54am

Joe:

John, post 43 was insulting, but at least you presented a real argument in there.

I've always presented the same argument Joe, for some reason, you decided to finally pay attention to it. I think I just needed to condense it into a bullet form like that for you to finally realize the argument that I've been making all along. And you wonder why I'm frustrated with you.

First, you present it like the conclusion of a proof, which isn't what I meant by weighing two options. It's still dichotomous thinking. One side is bad, the other side is better.

Your objection makes no sense. Of course it's a dichotomy, it's either a balanced budget amendment, or the ability to deficit spend. What other options are being considered right now in Congress? Please let me know.

No tradeoffs necessary. There's no costs to the benefit. It's all good. So your suggestions that I don't weigh options is not just wrong, it's hypocritical. Real tradeoffs means giving up something of value for something of more value. You have to choose which are more important cause you can't have it all. The way you presented this, it sounds like you think that you can have it all!

What? All right Joe if you say so. I've never done such a thing. I've fully recognized a balanced budget amendment is not a perfect solution, and I fully recognize it could mean high spending, but not as high, again, because you would eliminate spending in the form of interest payments on debt. Maybe you don't do a lot of accounting in your line of work, I do, I understand what the costs are associated with debt, you don't seem to appreciate that.

The balanced budget amendment may also reduce the political cost of tax increases, as I've mentioned. How much will it decrease? I don't know.

It may reduce you say, but you don't know to what degree, or at all. You just made it up, it's a speculative assumption. Well here's a real world example, not Joe's world of speculation, but a concrete example:

In my state of CT, we have a balanced budget amendment. Our newly elected governor, a Democrat, who won by a narrow margin, less than 1% against Republican Tom Foley, decided to pass a budget that included both spending cuts and tax increases. These tax increases have become so unpopular, Malloy now faces a disapproval rating that would indicate if the election were held today he would lose to his opponent Tom Foley by a sizable margin.

You see Joe, you can flap your gums all you want about whatever problems are in my arguments and then speculate all you want on what the reality would be, but you don't even bother to examine reality. You just rationalize yourself to these conclusions based on your own imaginations.

I don't have time at the moment to go through the rest of your post, if I feel like wasting more of my time I might bother to do so.

(Edited by John Armaos on 8/08, 6:57am)

Post 48

Monday, August 8, 2011 - 8:37am

Joe:

There's another problem with your conclusion. The tax burdens in each case aren't easily compared. You are trying to compare them based on raw dollars. If you borrow, you have to pay it back plus interest, so it is a higher tax burden. But a dollar today is not the same as a dollar tomorrow. Generally, it's worth more. A common argument that utilizes this point is that by borrowing money now, we can pay it back later when we are wealthier and it will be less of a burden. This might be true, depending on the interest rate vs. the growth rate. Certainly during a normal depression it is widely expected that there will be significant growth during the recovery. Borrowing might end up with a smaller real burden, even if the total dollars is more. So even if the rest of your assumptions were true, this conclusions would be unfounded.

You bring up a good point and you finally make an argument and acknowledge the tax costs associated with deficit spending. This argument is the standard reason for any loan for any business. The money you get upfront is worth more than the money you pay over the long run in interest payments, because your income can go up because the loan, which serves as capital, can allow you to start a business and increase your income, and the theory goes, the higher income is higher than the interest payments.

But, I see a flaw in this with relation to the government borrowing.

1) When the government borrows, leaving aside inflation for the moment, it must issue bonds. Individuals who buy those bonds are tying up their capital in this government debt, that otherwise could have been used for actual production/investment in the private sector. Any interest payments collected by bond holders is not an actual net increase in wealth, it's a redistribution of it. The only reason why we would experience more wealth in the future is because of the growth of the private sector, capital tied up in the bond market means capital not available for markets that produce products that people actually want, an actual measurement of wealth. So there is a lost opportunity cost here to consider. The government is not a productive industry, any funds diverted to it, whether it be taxes or bonds siphons off capital from the private sector.

2) While certainly you could have more wealth in the future than you do in the present, and this has been historically true, currently, it appears deficit spending is actually having the effect of decreasing the potential for future wealth creation. Massive deficit spending has undoubtedly hurt the markets as we have seen the news this past few days. It light of this the argument that it's better to borrow now because there is more wealth to be made in the future is specious considering what we're going through right now.

(Edited by John Armaos on 8/08, 10:24am)

Post 49

Monday, August 8, 2011 - 8:48am

Joe:

In this discussion, I've simply tried to point out that many of the assumptions about how it will work out are fanciful, and that there is a possibility of unexpected costs that could end up dominating the consequences. Everyone has to form their own judgments about how significant those points are. Weighing the options means recognizing that tradeoffs and risks exist, and making as good of a judgment as you can on how the two sides stack up. There is room for disagreement there.

But the problem is, to make these assumptions one has to actually look to reality and draw conclusions from it, not make up an imaginative consequence without reference to anything, see my CT example, see my Obamacare example, see my Bush Sr. 'no new taxes' example. Your arguments would bear more credibility if you actually tried to look to historical examples. The basic conclusion of your argument is that a balanced budget amendment would mean it would be easier to increase taxes than it would to decrease spending, because the former is politically least costly, the latter more costly. Well provide some examples with governments that have balanced budget amendments where this is true. We have many examples to look to.

Let me give you another one. In my town of Ledyard, there was a problem with dwindling tax revenues because of the downturn of the economy. The town council proposed keeping the tax rates what they were (i.e no tax increase) and looked to cut spending to meet the budget. I attended the town hall meeting, dozens of groups showed up to belly ache over the cuts. Teacher's Unions complained the kids were going to be deprived of an education because some were being laid off. The librarian showed up belly aching that the cuts to the library would be detrimental to the town. A police officer showed up, said that one layoff (no kidding, just one officer was proposed to be laid off) said that it meant someone might drive up the wrong ramp of the highway and kill someone (he brought this up because a police officer the other week had stopped someone from doing this). And then the local papers got a hold of the story, and presented their one-sided, pro-socialist agenda and said it meant doom for Ledyard. But, Ledyard residents that were not associated with any of these groups, by far the largest group of Ledyard that votes and thus actually matters to these politicians, supported the Town Council's efforts to not raise taxes, and cut spending. The Town did just that, did not raise taxes, and cut spending across the board.

Again, another example that is counter to your claims. A real world example, not speculation of unintended consequences, but an example of a government that does have to meet a budget and actually happens.

(Edited by John Armaos on 8/08, 10:27am)

Post 50

Monday, August 8, 2011 - 2:56pm

Just some information on the current legislation of the Balanced Budget Amendment right now for everyone's information.

1) Spending according to the amendment would be capped at 18% of GDP.
2) Tax increases would require 2/3 majority vote by Congress.

You can read more about it here:

http://www.heritage.org/research/reports/2011/07/balanced-budget-amendment-instrument-to-force-spending-cuts-not-tax-hikes

Some good things about this, and some issues that I think can be a problem. The good things, Congress would be Constitutionally prohibited from raising spending beyond 18% of GDP. So whether a spending program is popular enough wouldn't matter, because it would either mean cutting something else or not passing it at all, since spending is capped. Increasing taxes would be more difficult than it is now since it requires a high majority to pass it. Historically super majorities like this are rare.

However, one problem that can arise is how the government will handle the accounting of the nation's GDP rate. They could start using creative accounting and fudge the numbers to squeeze in more spending. However I'm not sure how far they could go with that, what would the error rate be between actual GDP and the government's accounting of GDP? Second problem, there is an exception for military emergencies, which could lead to a problem of the government declaring a perpetual military emergency that never ends.
(Edited by John Armaos on 8/08, 3:22pm)

Post 51

Monday, August 8, 2011 - 3:25pm

Just some information on the current legislation of the Balanced Budget Amendment right now for everyone's information.

1) Spending according to the amendment would be capped at 18% of GDP. [snip]

That 18% needs qualified.

Section 2. Total outlays for any fiscal year shall not exceed 18 percent of the gross domestic product of the United States for the calendar year ending before the beginning of such fiscal year, unless two-thirds of the duly chosen and sworn Members of each House of Congress shall provide by law for a specific amount in excess of such 18 percent by a roll call vote.
Section 6. The Congress may waive the provisions of sections 1, 2, 3, and 5 of this article for any fiscal year in which a declaration of war against a nation-state is in effect and in which a majority of the duly chosen and sworn Members of each House of Congress shall provide for a specific excess by a roll call vote.
Section 11. This article shall take effect beginning with the fifth fiscal year beginning after its ratification. (source)

Current projected spending for 2012-2021 is 23 to 24% of GDP.

Post 52

Monday, August 8, 2011 - 3:29pm

Sorry my overlook, thanks Merlin.

Post 53

Monday, August 8, 2011 - 3:37pm

John, you really need to stop trying to redefine my position or look for secret meanings that contradict my explicit statements. Even if your goal is winning, it's not really winning if you defeat a straw-man.

My post 45 is enough for me. It showed why your simplistic "proof" is riddled with serious problems. Your responses are just doubling down on a poor line of reasoning. Only your post 48 addresses my criticisms, and it has flaws:

1.) The opportunity cost is true, but tax increases would also have an opportunity cost. Even if that wasn't the case, depending on the growth rate of the economy, it might still be a smaller real burden than tax increases. There are other arguments for why borrowing might not be as bad, such as borrowing could come from foreign nations while tax increases would affect the US economy. Or that borrowing comes from people willing to load their capital, while tax increases affects everyone, potentially taking it from more important uses. But the key point is only that you have not disproved the point that debt can be less of a real burden than taxes.
2.) You aren't actually comparing deficit spending to tax increases. If the government had increased taxes instead, it would also have "the effect of decreasing the potential for the future". Runaway spending is the obvious problem. This example does not prove your point that tax increases are less of a burden than debt.

Note again your strategy. You could just accept that debt can, at time, be less of a real burden than raising taxes. You could follow up with arguments about how short-sighted voters underrate the cost of debt, so it is more costly then it seems. You could focus on how this underrated cost makes spending more attractive, and how the impact on long term spending would dwarf these differences. Or you could argue that even if deficit spending made sense (compared to tax increases!) some of the time, it is used even when the burden is higher. I can think of several other ways of continuing while accepting this point as true.

How do you approach it? By trying to claim that it doesn't apply in the case of government. You try to claim it is flawed to use this argument with relation to government spending. Both arguments are faulty, and don't compare deficit spending to tax increases.

This is just another example of trying to ignore factors that don't support your position. But that approach is only necessary because of how you are trying to prove it. You're trying to show that the tax increase is superior in every case to the debt increase. That means any factors that contradict this view are seen as a threat that needs to be discredited or your whole case falls apart. But if you were taking an inductive approach, the fact that debt can sometimes be less of a burden than tax increases would not negate the conclusion that a balanced budget amendment is better. It would be just one of many factors that need to be weighed. As I said in a previous post, I think the other factors, like the change to spending patterns, would dwarf this. Your approach can't handle degrees. I can say that sometimes this might happen, and other times this other thing might happen. You're stuck saying it happens all of the time or none of the time.

Now if the pattern holds up, you will now accuse me of saying that deficit spending is always less of a burden than tax increases and try to prove "me" wrong. It is easier to argue against an unrealistic position that claims there can be no possible counterexamples. I know that from arguing against your positions.

Post 54

Monday, August 8, 2011 - 5:08pm

Ok Joe fair enough, but you took several posts to finally even address what the potential costs are of deficit spending and offer an argument worth considering, why it took this long I don't know, why the obnoxious tone I don't understand, why the difficulty from you acknowledging any points I made I don't know, why ignoring arguments over several posts before finally addressing it I don't know, why attributing things I never said I don't know, why putting words my mouth like the voters are 'eager' to cut spending like I'm some moronic optimist I don't know, why you make my position out to be that the balanced budget amendment is some kind of libertarian ideal, I don't know. But at this point I don't care, talking with you I've learned is tedious, infuriating and you can become quite insulting.

Regarding your arguments:

1) You have a point. It can be less of an economic burden. But there are still other problems, see 2)

2.) You aren't actually comparing deficit spending to tax increases. If the government had increased taxes instead, it would also have "the effect of decreasing the potential for the future". Runaway spending is the obvious problem. This example does not prove your point that tax increases are less of a burden than debt."

2) But I'm saying it's not as easy to raise taxes as it is to deficit spend. Deficit spending makes it too easy to bring it to an economic breaking point where wealth creation is severely restricted and you risk hyperinflation, true the same would happen with high taxes (except no inflation), but my argument is that there is a political cost that would be too high to raising taxes too high. Not so with deficit spending. You might concoct these potential scenarios where it's possible that it would be economically advantageous to deficit spend rather than tax because it could mean less of an overall burden, but this is highly unlikely to happen and simply wishful thinking because the political cost historically has been almost nil to deficit spend. Given the historic levels of deficit spending and the political ease of doing it, I can't believe anyone who has followed politics at all can reasonably believe that it would ever realistically result in a smaller burden to tax payers. Talk is cheap. Carrying deficits that are small enough that it's not an overall worse burden to Americans is impossible. And, you also have the risk of hyperinflation to boot.

And you've dropped the argument that with a balanced budget amendment it must mean that the political benefit/cost analysis favors spending increases and tax increases rather than spending cuts or tax cuts. Which I take this to mean you don't actually know this would be some kind of given, and will you acknowledge, after having posted a few counterexamples, that there are plenty of instances where governments with balanced budget amendments did not experience this? You said here:

Now if the pattern holds up, you will now accuse me of saying that deficit spending is always less of a burden than tax increases and try to prove "me" wrong. It is easier to argue against an unrealistic position that claims there can be no possible counterexamples.

Well what about my counterexamples that you still haven't addressed? The counterexamples above to your assertion that a balanced budget amendment must mean that the political benefit/cost analysis favors spending increases and tax increases rather than spending cuts or tax cuts?

Or did you mean to say it could happen? If so could you provide some examples from local or state governments?

On that note, this is my last post on the subject. My arguments I think are solid enough, and continuing on would just mean you are going to distort them into some other meaning. I've wasted too much time on this. I'll be taking an extended break from this website, or I may decide to not post at all here. It's become too hostile to deal with you.

Post 55

Monday, August 8, 2011 - 6:38pm

John, you started your post on the right footing. "Fair enough". For a minute I thought we were going to get back to real issues instead of the pretend positions you keep accusing me of. And even though you followed it with a "but you took several posts...", I would have responded that I had repeatedly acknowledged the costs of deficit spending, so didn't feel any need to argue the point since we were in agreement. I only brought up the fact that deficit spending might potentially be a smaller burden compared to tax increases to show that your "proof" was flawed. And inductive approach would look at the strength of the effects, including the likelihood, and I continued to argue that the change in spending pattern was the big concern, and the point of disagreement.

Even acknowledging point one looked like we might actually agree with the method of analyzing the tradeoffs.

Even your reply to point two started okay. Using the phrase "but this is highly unlikely to happen" sounded like we had finally communicated. That yes, there is a possibility of it happening. We can't rule it out just because we want to. So let's discuss the actual likelihood. Your assessment of it being highly unlikely isn't unreasonable. I think it is more likely than you think. I've mentioned reasons why. I mentioned that tax increases are unpopular but so are spending cuts, and the difference is what matters. I've pointed out that passing a bill for future spending will eventually become "current spending" and spending cuts will be required. I've pointed out how the costs fall unevenly upon parties. You might still believe it is highly unlikely, and you might even be right, but up until now you've refused to acknowledge the possibility that it will go the other way. And you've tried to ignore my points by either redefining them into something absurd, or ignoring them and trying to focus on the dollar for dollar different between tax increases and deficit spending.

So even this is a step forward! Alas, you can't hold back. "Carrying deficits that are small enough that it's not an overall worse burden to Americans is impossible." Once more, instead of arguing that these effects are unlikely to impact the overall result since other factors are more important, you once again make the all or nothing statement that is it impossible.

Not only do you jump back into the flawed approach, but your statement is wrong. And it's wrong for so many reasons! First, there's nothing at all impossible about running small deficits. It's absurd to say otherwise. Second, the size of the deficit doesn't matter, the growth rate does (and the interested on the debt). Whether it's a billion or a trillion dollars, if the economy grows faster than the interest, it could be considered less of a burden. You might replay that a large deficit will reduce the growth rate, as we both agreed with earlier. But that's another flaw because you're comparing a situation with deficits vs. a situation with reduced levels of government spending. If you compare it to tax increases, which is suppose to be the point, then they both hurt growth and about the same. Again, it's perfectly possible for the deficit spending to be less of a real burden.

And to make sure that there is no semblance of progress in this discussion, you follow up with:

And you've dropped the argument that with a balanced budget amendment it must mean that the political benefit/cost analysis favors spending increases and tax increases rather than spending cuts or tax cuts. Which I take this to mean you don't actually know this would be some kind of given....

I never said that. I've even said I don't belive that. I don't. You're again trying to paint my position as the opposite of your position, which is that the amendment would favor tax cuts or spending cuts. What I've said is that the political cost of tax increases may go down, again depending on the details of the amendment. It may end up favoring spending increases and tax increases. It may not. I've pointed out from the first post that this is a risk. I wouldn't argue it was an inevitability.

I didn't address your "counterexamples" before for two reasons. The biggest reasons is because, like most of your posts, you are attacking a straw-man. I haven't taken absurd position like you have and said it is impossible to have spending cuts or that tax increases will become popular. A counterexample disproves a deductive proof. When you make absolute statements, I can show a counterexample that disproves it. But an inductive argument isn't disproved. A counterexample is only evidence, and only anecdotal evidence. Counterexamples would work better if I were running around saying this or that is impossible like you do.

The second reason is the examples provided are flawed. They don't prove what you think they prove. Take the state that passed spending cuts and tax increases to balance the budget. You assume it is unpopular because of the tax increases instead of the spending cut. You provide no evidence, but I'll go ahead and pretend that you did. The problem is that while it may be unpopular, we don't know how unpopular the alternative would have been. If the taxes were left the same, and spending was cut even more, you might have even more anger. Looking at Greece as a current example, the people there are outraged at the government for accepting the austerity measures. But their point of comparison is not the alternative (bankruptcy), but the good life they were living as they got into the mess.

There is a real problem with comparing an event that actually happened with an event that didn't happen. There's no real way to make the comparison without making some assumptions. But you're attempting to use this "counterexample" as proof of your assumptions!

I guess there is a third flaw too. The fact that taxes were increased by the government lends support to my point that tax increases may become more politically viable under a balanced budget. To really show evidence (not prove!) your point, you'd have to provide examples or statistics on governments not increasing taxes. The fact that they are increasing taxes suggests it was politically the least costly choice. I guess that means that your counterexample is my counterexample.

As for whether you take time off or leave, you know that is your choice. I don't kick people off this site just because they disagree with me, even when they're as rude as you have been here. And despite a couple recent disagreements, your presence on the site is valuable.

Post 56

Monday, August 8, 2011 - 6:50pm

Sorry Joe I actually don't care to read what you wrote.

Again per the personal message I sent you, please delete my account and remove my name from this website.

Post 57

Monday, August 8, 2011 - 7:55pm

I haven't been following this thread closely, but might I point out that posted text on this forum strips out a lot of emotion... and can make an argument become much more heated than it needs to be.

John, I like you, and I'd prefer you were to let things cool off and reconsider.

Cheers,
Dean

Post 58

Monday, August 8, 2011 - 8:54pm

I agree with Dean on all counts. I personally hope you don't leave forever, John. You are a great thinker, a curious person (a highly valuable trait) and a great inspiration here.

Ed

Post 59

Monday, August 8, 2011 - 9:07pm