posted
I like the idea too. It worked in the 30's and 40's. But it has to be something functional and not just a make work job. Projects like that created the parks system, made a lot of natural resources accessible to visitors like Yellowstone and Mammoth Caves. They created the TVA and the Hoover Dam. The problem is in part getting people to leave their family and homes almost military style and getting them to go wherever the government sends them, but I do like the idea, so long as we get value for it.
Posts: 21898 | Registered: Nov 2004
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posted
Tax breaks on mortgages are a huge incentive to move other sorts of debt (for which one does not receive a tax benefit) into mortgage debt. There were also several less direct incentives, such as some particular gov't interest rate policies. Oh, and a lack of policing against due diligence fraud in mortgage issuance.
The first made it several thousand dollars more advantageous to have a mortgage than other sorts of debt -- that's a huge incentive.
Re: public works, whether or not that worked is a considerably unsettled question.
Posts: 15770 | Registered: Dec 2001
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posted
Worked as in actually helped get the country out of its economic downturn. I don't know much about economic history - only had one semester in the subject - but I do remember that the topic is still ferociously debated.
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I was taught that the government moved into the equation when the German market collapsed by changing the contract laws that governed the tulip trade. It allowed the contracts to become options to buy instead of contracts to buy at a set price and quantity mandatorially. To keep the farmers from going completely bust the government set a minimum floor on contracts to the cost of stock and planting.
None of which prevented the bubble from bursting.
Posts: 110 | Registered: Jan 2001
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quote:The reality falls more in line with typical business cycle activity.
Again, I really wish you didn't pass off statements of faith as fact. You would like to bevieve that it falls in line with typical business cycle activity. This may even be the case, based on the incomplete evidence we have. However, the evidence is ambiguous and the case for it being a run away market is at least on the same level of support as what you are suggesting.
Posts: 10177 | Registered: Apr 2001
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posted
I haven't read the book, but I've hunted down a number of reviews. Unless the author is making some very amateur mistakes, he dissects the idea pretty well. He shows external demand for tulip products, continued trading after the 'crash', that the price fluctuations generally reported are not accurate reflections of far more sedate price movements, that the economy was not overly harmed by the 'crash', et cetera.
Also, the government was breaking contracts and setting minimum prices, and those are substantial interventions that could accelerate any crash that did happen. So, either it wasn't a major crash, in which case your argument for major crashes caused by investors without specific perverse incentives by gov't falls apart, or it was a huge crash, but the gov't manipulation of the market helped it along.
New example?
I am being perhaps somewhat unfair. Gov't tends to have its fingers in everything, at least a little. However, I am willing to sign on to a stronger statement: major crashes with long term effects always seem to be in areas incentivized by gov't policies that have changed within a decade or less before the 'crash', or are subject to major gov't interventions during the early stages of the crash that accelerate the decline, or both (which seems to be the case today, see below).
Btw, I think this morning we saw an excellent example of bad policy choices by the federal reserve. They made a major rate cut to forestall market declines, which has that effect in the short term, but provides, again, even more incentive to acquire debt. I'm in favor of the fed member who argued that we should take the hit now so as to be in better shape latter.
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quote: Some claim that war is a benefactor, since historically it often has focused the use of resources and triggered advances in technology and other areas. The increased production and employment associated with war often leads people to claim that "war is good for the economy." Others claim that this is an example of the broken window fallacy. The money spent on the war effort, for example, is money that can't be spent on food, clothing, health care, consumer electronics or other areas. The stimulus felt in one sector of the economy comes at a direct—but hidden—cost to other sectors.
More importantly, however, war literally destroys property, buildings, and lives. The economic stimulus to the defense sector is offset not only by immediate opportunity costs, but also by the costs of the damage and devastation of war. This then becomes the basis of a second application of the broken window fallacy: it is claimed that the rebuilding that follows war and its destruction provides a further stimulus to the economy, this time mainly in the construction sector. However, immense resources are spent merely to restore things to the condition they already were before the war began. After the war, the nation has a rebuilt city; before the war, it had a city and time in which its labour could have been used for more fruitful purposes. Further, the fixed amount of natural resources could have been used to build a second city rather than to rebuild a destroyed city, hence highlighting the occurrence of waste. An example of this in America is that many highway and bridge projects that were planned in the late '30s had to be put off until after the end of the Second World War, and the pent-up demand for not only roads, but houses, cars, and even radios led to massive inflation in the late '40s. The war also delayed the commercial introduction of television, among other things, and the resources sent overseas to rebuild the rest of the world after the war were not available to directly benefit the American people.
Thus the 500+ billion$ spent on a military could be spent on paying off the debt, on improving health care, on balancing the trade imbalance, stabilizing the dollar and invested in the developing economies abroad for a better tomorrow. Instead we have a military machine that was meant to fight a power that nolonger exists, and is hugely unbalanced and hamstrung to a doctrine of overwhelming force in the wrong conflict at the wrong time. The US needs its armed branches, its needs them professional and well trained as every nation as a fundamental right for self defence and there is nothing wrong with the US obligating itself to making the sea routes a little bit safer for civilian boats, but it doesnt need 13 super carriers, 13 helicopter/jump carriers would dramatically reduce costs for the same effect, you dont need dozens of seawolf class submarines, 2-3 would constitute a suitable deterrent.
The United state doesn't need 3 million men and woman or to defend against the soviet union, it can call back many of its forces and demobilize them freeing up resources for the public sector, some countries like american bases and troops but they dont need entire divisions, a few regiements or a brigade at most would be sufficient.
Does America need 2000 F-35's? 250 would be arguably sufficient in peacetime producing maybe 1000 export models for sail to allies is one thing, but building a huge crap tonne for personal use is absurd.
The funding spent on the military would be better used sending men to Mars, on increasing NASA's budget, on the economy, on the american people. The US has friends, you have allies with considerable and very capable navies, armies, and airforces that would gladly step in if given the chance with a few garantees from the Americans.
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posted
Neithere here nor there, but the next generation of carriers will likely be smaller, and strange as it may sound, even a bit stealthier, but we're long past the time when baby flat tops is going to cut it. The only way you can project force at sea is with a carrier. They give you forward operating capacity, they're like mobile bases, and since 2-4 of them are constantly in port for refitting, there's really only 8 or so at sea at any given time, and it's a big ocean. Besides, once they are built, running them is a drop in the bucket of the larger defense budget.
But regardless, I'm all for reduced military spending. Cut a hundred billion, close some bases, maybe less overall troops, but not for a reduced Navy or Air Force. Troops can be trained a lot faster than we can build more planes or ships in a pinch. China, India, Russia, some of Europe, there's a quiet arms race going on right now, and while I'm not of the opinion that we're going to be invaded sometime soon, withdrawing in the way you suggest would leave a massive power vacuum in the world, and I can't even imagine what the reprecussions from that would be.
Like us or not, we do provide an important stablizing function in the world. Yes by the way, we do need a lot of F-35s. It's the next generation fighter. F-14s were just phased put, we don't really use F-16s anymore, they're for export, the F-15 is falling apart due to age, and the F-18, while a multi role fighter bomber, doesn't have stealth capacity, and there aren't enough of them. So we need F-35s and F-22s, and then we don't have to buy any more for a couple decades. Military procurement is something I'm generally going to get behind, because technology is what has allowed us to use so small a number of people compared to other nations for the level of force that we actually project. Besides, I think it's cheaper in the long run than just having sheer numbers.
And btw, it's not just about "making sea routes a little bit safer for civilian boats." We make international trade without threat of piracy a reality. Before us it was the British navy, and they weren't nearly so good at it as we are. If you removed the US Navy from the world's oceans as the force of power it is today, I think you'd see an explosion in piracy, and a bit of chaos in international trade as a result.
Posts: 21898 | Registered: Nov 2004
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Blayne Bradley
unregistered
posted
the smaller carriers I was talking about are the stealth jump carriers you speak of, I'm talking about the ones described in a Popular Mechanics magazine.
Airforces cannot win wars, its is the infantryman that occupies the land, instead of using an overwhelming amount of force, like think of it this way I am not asking to reduce say 300 aircraft down to 50, I am saying reduce 5000 down to 500-750 you would get the same effect for a fraction of the cost.
And calling it an arms race? Not really, the Russian T-90 and the Chinese T-99 had been in development for the last 15 years, an arms race implies sides building up large and larger stockpiles of weaponry, both China and Russia are downsizing their respective military while replacing obsolete hardware with more capable ones, not exactly an arms race.
Protecting the sea routes is not something that only America can do, they can with the help of countries near the major routes secure them, if more effort was spent sharing the defence burdon onto others then less effort would be needed.
posted
I'm all about shared defense burdens. Now you can take your show on the road and convince the rest of the world that they need to spend more on their navies. I think you'll hear a lot more silence when it comes to the complaints in US military spending. They like to rail against us, but they don't want to pick up the tab themselves.
There'll still be the supercarriers, and I guess I don't know what you mean by when you say "jump carriers." Carriers will always have catapault launched aircraft, until we can build a VTOL aircraft that has all the same capabilities that a launch aircraft does. Arguably we'll have that with the F35 JSF Marine variant. But we're still out to lunch on that one.
And come on Blayne. China is increasing their military spending by leaps and bounds every year. Do they lag far behind the US? Yes. Are they pumping it up their spending every year by the billions? Yes. They're buying ships, planes and tanks from Russia, or building the designs to make them themselves, to say nothing of stealing technology from us. India just bought 900 T-99s from Russia, and licensed the ability to build their own afterwards. That's not a build up of arms?
They're beefing up, and with bigger and better arms, they aren't downsizing for the sake of efficiency like you seem to be implying. And as to the air force, can an air force with an invasion? No. Can they repel invaders? Sure. Sure they can. Your invading soldiers can't get to my shores when I blow up your ships before they get here. Air superiority is probably the single biggest advantage you can have in a war.
Posts: 21898 | Registered: Nov 2004
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posted
As a percentage of GDP, the US and China are spending similar amounts on the military... Just saying.
Posts: 433 | Registered: Feb 2005
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