Bruddah IZ
DA
"Wendell's get da biggest"
Essential Economics for Politicians
- Thread starter Bruddah IZ
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Bruddah IZ
DA
The Economic Stupidity of the Carrier Bailout
Read more at: http://www.nationalreview.com/article/442665/trump-carrier-bailout-economically-unsound
For Carrier’s accountant, any pecuniary benefit will do. So far as the bottom line is concerned, a $7 million tax credit is the same as a $7 million check or $7 million in Apple stock or $7 million in gold. It’s all +$7 million on the line where you want it.
The ethical question is more complicated than the pop-cons let on, too. Our government runs deficits, which means that a federal tax credit of $1 million given to Smith is $1 million in taxes that eventually will have to be paid — by Jones, and Wilson, and Humperdink — with interest. Carrier is a division of United Technologies (the Otis elevator and Pratt & Whitney engines people), which is first and foremost a government contractor, a firm that derives at least a quarter of its revenue from government contracts, and 10 percent of it from Pentagon contracts alone. It is a company that has competitors — competitors who employ Americans and pay taxes, just as Carrier does. These firms and their employees are put at an economic disadvantage by the subsidies paid to Carrier thanks to Trump and Pence. That means that some of these companies probably will be less profitable, and that they will not hire people they otherwise would have hired. But you’ll see no Trump press conference celebrating that. This is a case of Frédéric Bastiat’s problem of the seen vs. the unseen. The benefits are easy to see, all those sympathetic workers in Indiana. The costs are born by sympathetic workers, too, around the country, and by their families and by their neighbors. But those are widely dispersed, so they are harder to see and do not hit with the same dramatic impact. The math is the math. Trump and Pence are trying to sell you a free lunch. But the math is the math is the math. Trump and Pence are trying to sell you a free lunch, the same way the Keynesians and their magical spending multiplier do when they promise that government stimulus programs (Trump is pushing one of those, too) will somehow magically pay for themselves.
Read more at: http://www.nationalreview.com/article/442665/trump-carrier-bailout-economically-unsound
For Carrier’s accountant, any pecuniary benefit will do. So far as the bottom line is concerned, a $7 million tax credit is the same as a $7 million check or $7 million in Apple stock or $7 million in gold. It’s all +$7 million on the line where you want it.
The ethical question is more complicated than the pop-cons let on, too. Our government runs deficits, which means that a federal tax credit of $1 million given to Smith is $1 million in taxes that eventually will have to be paid — by Jones, and Wilson, and Humperdink — with interest. Carrier is a division of United Technologies (the Otis elevator and Pratt & Whitney engines people), which is first and foremost a government contractor, a firm that derives at least a quarter of its revenue from government contracts, and 10 percent of it from Pentagon contracts alone. It is a company that has competitors — competitors who employ Americans and pay taxes, just as Carrier does. These firms and their employees are put at an economic disadvantage by the subsidies paid to Carrier thanks to Trump and Pence. That means that some of these companies probably will be less profitable, and that they will not hire people they otherwise would have hired. But you’ll see no Trump press conference celebrating that. This is a case of Frédéric Bastiat’s problem of the seen vs. the unseen. The benefits are easy to see, all those sympathetic workers in Indiana. The costs are born by sympathetic workers, too, around the country, and by their families and by their neighbors. But those are widely dispersed, so they are harder to see and do not hit with the same dramatic impact. The math is the math. Trump and Pence are trying to sell you a free lunch. But the math is the math is the math. Trump and Pence are trying to sell you a free lunch, the same way the Keynesians and their magical spending multiplier do when they promise that government stimulus programs (Trump is pushing one of those, too) will somehow magically pay for themselves.
Bruddah IZ
DA
There is no magical revenue fairy. And, as a budgetary matter, targeted tax benefits are identical to spending, both for the government and for the beneficiary. This is not a question of ethics but a question of accounting. Somebody always has to pay the bill, eventually. It probably won’t be the pop-con on the radio telling you that we can make money by giving it away, so long as we give it away to the right sort of people: Solyndra bad, Carrier good. Conservatives have a hard enough time of it as it is without inflicting needless stupidity on themselves.
Read more at: http://www.nationalreview.com/article/442665/trump-carrier-bailout-economically-unsound
Read more at: http://www.nationalreview.com/article/442665/trump-carrier-bailout-economically-unsound
Wez
DA
Bravo!
Hüsker Dü
DA
. . . and this is just the first case. With Trump's worldwide business dealings the conflicts of interest will be endless as foreign, and domestic, governments and businessmen strive to curry favor with the soon to be president of the United States of America. The wolf is already in the hen house and we let him in . . . welcomed him! Well, at least a minority (in the right states) voted him in.
Bruddah IZ
DA
The Fed Reserve Wolf has been in the hen house for quite some time now and there is nothing Trump can or will do about that.
Hüsker Dü
DA
They may now be pointing at the wrong wolf for you to fear.
Bruddah IZ
DA
They always do. Regardless of who is in the White House.
The stick never needs to be used if you know how to dangle a fresh carrot.
Incentives spur optimism, while penalties create distrust and pessimism.
The best thing the government can do, is take less.
Bruddah IZ
DA
Bruddah IZ
DA
He could do that since Carrier products would become more expensive.
Bruddah IZ
DA
“There is no such thing as a legitimate price for anything in healthcare,” according to George Halvorson, former chairman of Kaiser Permanente, the giant health maintenance organization based in California. “Prices are made up depending on who the payer is.”
https://fee.org/articles/how-to-repeal-and-replace-obamacare/?utm_medium=popular_widget
https://fee.org/articles/how-to-repeal-and-replace-obamacare/?utm_medium=popular_widget
Wez
DA
Fix the cost problem, you fix the whole problem. I wish Price success and I also wish the GOP had spent one minute of time addressing the cost problem instead of just obstructing anything Obama was doing.
Bruddah IZ
DA
Wez
DA
The system needed fixing, why didn't they participate? ACA fixed one problem, millions of uninsureds, it didn't fix the rising cost problem, which in the end, is the most important to fix.
Bruddah IZ
DA
Wez
DA
It did, it just didn't fix the rising costs, so the whole thing can't work if we just let our healthcare system continue fucking us...
Admit it, US Healthcare is a total failure of free markets. This from a guy who is a fan of our free market system, just have to be able to admit where it's limitations are.
Bruddah IZ
DA
Wez
DA
Risk pools are not an issue if everyone is covered. The problem is the "coverage" was/is too expensive.