Well Known Biases

Politics, Economics, and the Law

Category Archives: Economics

Warren Buffet, Millionaires, and Taxes

As Russel B. Long said, “Don’t tax him. Don’t tax me. Tax that man behind the tree.”

Warren Buffett has stated that he thinks the rich should be paying more, and predictably other millionaires agree with this, provided they aren’t actually required to pay. I don’t have millions of dollars, but if I did I’d be right there with them, telling Mr. Buffett that he can write as big a check as he wants to the U.S. Treasury if that’ll make him feel all warm and fuzzy inside. However I believe that, considering what the government does with our money, there are better uses for it, such as lighting it on fire. One might even bypass the bureaucracy and use that saved cash for some legitimate charity. It’s not that the government isn’t in a financial pickle, it’s just that pretty much anything I could dream up to do with my dollars is a better use of them than what the federal government will be doing. There. That addresses some, though hardly all, of the philosophical concerns.

On to more practical matters. At this point, proposing to raise one group’s tax rate and/or lower another’s is nothing more than cynically trying to garner votes and support. In 2011, 53.2% of federal income was derived from borrowing [source]. 33.7% is from personal income tax, and 7.2% from corporate taxes. In the coming year it is expected that the federal government will add over a trillion dollars to the debt, due primarily to their enduring hard-on for entitlements and wars. The GDP of the United states is about $15 trillion. Attempting to extract an extra trillion dollars in taxes won’t help us out of the current recession/depression, instead simply further stagnating the economy. And if you did somehow manage that, that only gets us closer to breaking even for this year. It doesn’t even begin to address paying off the debt, which now exceeds 100% GDP.

And that is why I’m unimpressed by all this tax talk. We’re so far in the hole that an extra 10% taxes on anyone or everyone will make no real difference, and they’re going to spend it on things we don’t need or want anyway.


Early Retirement and Generous Pensions for Greeks in “Hazardous” Jobs

Today I read a blurb on Overlawyered concerning the Greek retirement and pension system. It seems that those working in hazardous jobs are entitled to retire quite early, and with rather generous pensions. However, the definition of hazardous has expanded to include a great many careers not commonly thought to be so, such as radio announcers and hairdressers. Reading the linked articles, I’m not completely sure whether the more absurd examples still qualify, or whether reforms have been made, but either way it explains a lot. This, along with their unusually liberal disability payouts, paint a ridiculous picture of a government that has spent decades hurling baskets of money at anyone who came ’round and asked.

I can only imagine how this plays in the German press.

The Ship is Going Down

‘The US Government is Bankrupt’ from Casey Research.

“The only questions are political; the economics are quite clear.”

Please Refrain From the Most Obvious Jokes

The Greeks now consider pedophilia (among other things) a disability deserving of government money.

Greece is in rather dire straits as it is, fiscally speaking. Twenty percent of workers are some kind of civil servant, most everybody is on the dole, and nobody bothers to pay their taxes. Given what most governments do with the money they receive, I personally wouldn’t call tax evasion any great moral crime. However, you can’t have it both ways; if you’re going to hand out checks from the government (either in the form of state jobs, or entitlements), someone has to be throwing into the pot. And if nobody is, you end up with, well… you end up with exactly what’s happening in Greece. So finding new reasons to hand out free money is an economically questionable decision at best.

It hopefully goes without saying that from an ethical standpoint it seems difficult to think of a good justification for subsidizing pedophiles, compulsive gamblers, pyromaniacs, kleptomaniacs, etc. These people need help, of course, and if you’re of a mindset that believes the government is the right tool for that task, you might even conclude that public funds should be allotted for this purpose. Paying for therapy is, however, a different beast entirely than simply handing out checks. A reasonable person might argue for the former, but the latter is pretty indefensible. Especially considering it’s the Greeks, and they’re broke.

Afterthoughts: What committee makes these decisions, and how do I arrange to sit in on a session? I’d really like to have heard this debate. Also, free money from the government is a tried-and-true method of securing votes. Who is courting the pedophile vote? Or the fire-starter vote? Do these groups comprise large enough voting blocs to swing an election? Ponder that…

You Can’t Blame the Free Market When it Doesn’t Exist

Corporatism vs. the Free Market, over at Reason. A response to those who would erroneously blame the relative lack on income mobility in the United States on capitalism.

It’s not the fault of capitalism, because America isn’t a capitalist nation. Instead try “crony capitalism,”  “corporatism,” “corporate socialism,” or perhaps very nearly “fascism.”

Also a pair of old articles at The Freeman are linked within the above, which I’ll also directly link here for the sake of emphasis:

Government Is No Friend of the Poor
Scratching By: How Government Creates Poverty as We Know It