Stockman's Point of No Return

[flintlock]

Re: Stockman's Point of No Return

the main issue is that they didn't dismantle this industry after the collapse of the soviet block.

Exactly

[dcarrigg]

Re: Stockman's Point of No Return

Every time they threaten to cut a base in the US , an uproar goes up because it will cost jobs, with no consideration whether we really need the base or not. Sooner or later this country will come to the realization that it may have to just pay people rather than continue to rationalize reasons to employ them.

An interesting point of view. It seemed to be the way Western Europe was going before this last decade of cuts. Regardless, if we could simply learn to be comfortable with letting people work from home instead of crowd up offices, parking spaces, highways, etc. the operational costs you mention would mostly melt away. The rational behind putting on a (pants)suit to go sit in a cubical at a computer with a phone when these things exist in a house is somewhat lost on me anyways.

[thriftyandboringinohio]

Re: Stockman's Point of No Return

So which alt-E is available for flying jets?

Your basic point is correct- jet fuel is great example of something that's hard to substitute. BUT....

A jet engine is actually one of the easiest engines to run on many fuels. It's essentially an open-air, free-flame burner, like on a stove or a boiler.

Common jet fuels, good kerosene, and diesel fuel are all about the same thing and somewhat interchangeable, with the diesel engines more sensitive to minor fuel variations than either turbines expecting jet fuel or heaters expecting kerosene. Of course there's a host of fuel additive and contamination issues for any fuel (jets need biocides and anti static; diesels need detergents; kerosene needs colorant) but the basic fuel is all the same, and the US military has had a single-fuel goal for years, so the tanks and the trucks and the jets and the ships and the portable generators can all burn the same thing.

Kerosene/diesel/jet fuel has the best energy-to-weight ratio of any common liquid fuel. Trying to run aircraft on other fuels would really reduce range or payload. But in a pinch one could run jet aircraft (poorly) on gasoline or alcohol or just about any liquid that burns well.

[we_are_toast]

Re: Stockman's Point of No Return

Toast, maybe I'm not clear, are you still hung up on all that partisan crap? Sounds like Stockman is making perfect sense, and your only objection is the political party of the messenger? I think most of what he says is spot on. Especially the part about Keynesian economics being a glorified Ponzi scheme. And if you are worried about cutting people's jobs when the military is cut, we'd be better off just sending them a check every month to do nothing than to keep up this Empire charade.

I became a member of the Concord Coalition almost 20 years ago, just a few years after Stockman was leaving government. I consider him to be very late with his concerns over the huge budget deficits that he helped create. I disagree with his criticism of Keynesian economics and feel he deliberately misrepresents it. Since he now reflects concerns that I have had for more than 20 years, I certainly consider it better that he is late, rather than never.

Despite all the tweaking and twisting of economic knobs like interest rates and money supplies and what the FED does, these are relatively minor bumps in the road to the advancement of civilization as compared to the problems of overpopulation, global warming, and civilizations dependence on cheap fossil fuels. The last 3 might very well lead to a collapse of civilization as we know it.

What you call "partisan crap" is a fundamentally different approach to addressing these critical problems. One partisan group has chosen to completely ignore and even make these critical problems much worse and hasten our rapid course over the cliff. Many in the other group understand these critical problems, but don't posses the political power to do much about them. It's not about jobs, or budget deficits, or the size of government. I consider these problems to be serious, but not nearly at the civilization ending level. Having the huge military address it's dependence on fossil fuels might very well lead to solutions the rest of the world could use, and it might be acceptable to the partisan group which consists of half the "partisan crap". I offer the suggestion as a possibility to address a possible civilization ending problem.

$.02, IMHO, If it pleases the court...

[flintlock]

Re: Stockman's Point of No Return

I think we are on the same page on most things here. But honestly, I can't even 100% decide which party you are claiming "understands these problems", but I suspect it is the Democrats. The reason I say this is that Democrats held a full congressional majority as well as the office of the President but during that time we saw a massive build up in Afghanistan/Pakistan, rather than a withdraw, which came as somewhat of a surprise to me.

As far as AGW I am still somewhat on the fence, though I will add that many Democrats seriously undermined their credibility on this by trying to turn the whole mess into a power/money game with carbon credits, etc. People tend to not take the messenger seriously when the messenger tries to stuff his pockets with cash at the same time he's warning us. But regardless, we pollute like crazy and that alone is good enough reason to clean up our act.

100% with you that overpopulation is being ignored and kicked down the road for others to deal with. Its the #1 issue in my opinion and one that is the ultimate cause of most of our other problems. Pollution, wars, oil dependency, and even massive deficits. All directly or indirectly attributable to overpopulation. Relying on "growth" to save us economically will ultimately ruin us all in the end. Its sad that that has become our only hope. Growth.

I guess where I differ with you is that I don't find any substantial differences between to two parties. Dems talk the talk about cleaning things up, alternative fuels, deficits, and ending Empire, but in the end its mostly talk. I know quite a few Democrats are sincere in their beliefs, but like so many actually in politics, POWER is more important to them ultimately, and in the end nothing much changes. I applaud their efforts at higher fuel economy for autos. It's a start, but not enough and we all know it.

As far as Stockman, I understand that he's coming off as a hypocrite, but how many others do we know, including ourselves, that have changed their minds in the last 20 years about something? I know I fell for a lot of the "trickle down theory" and other nonsense of the Right. I just am glad to hear anyone telling it like it is, especially from the Right.

It's very hard on this forum to tell exactly how much "Party loyalty" plays a role in the discussion. We all as humans tend to rationalize and see things in a light that will suit our notions of who is right and who is wrong. I'd rather just see it as WHAT is right and WHAT is wrong. Seems like you feel the same way. I certainly was not aiming any type of insult at you, and I'm sorry if you took it that way.

I'll add that I think many Republicans are for smaller military, alternate fuels, and a cleaner environment. Its just that both sides are too busy fighting each other to give much of a damn about the rest of us. That is the partisan crap I am talking about. Their personal ambition. Or the political grudges all us us hold on to. How many Democrats in congress are for reducing EMPIRE yet still support Obama? My point is that none of these jokers value the Country over their own personal ambition. And in today's politics, to get elected, you have to bash the other party, regardless of what you really feel. Its ridiculous and has left us with the dysfunctional Congress we have now.

[flintlock]

Re: Stockman's Point of No Return

An interesting point of view. It seemed to be the way Western Europe was going before this last decade of cuts. Regardless, if we could simply learn to be comfortable with letting people work from home instead of crowd up offices, parking spaces, highways, etc. the operational costs you mention would mostly melt away. The rational behind putting on a (pants)suit to go sit in a cubical at a computer with a phone when these things exist in a house is somewhat lost on me anyways.

Maybe it is because I am a small business owner, but there is so much inefficiency and waste in any large organization that I can't believe it. I remember many years ago when I decided to try a career change. Worked in an office of a major Japanese electronics manufacturer. It was when FAX machines were just coming out and they cost thousands of dollars. They were paying me good money to "test" the equipment by sending a fax to see if it worked. I did my daily "quota" by about one hour into the job. Then they told me to slow down and just look busy. You were told that any time a Japanese man showed up to look busy. Otherwise we just chatted all day. So boring I quit after a week. The friend who helped me get hired on was a personal secretary for the branch boss. A typical assignment for her was to make a map for the big boss to show him where to go that day. That was her big assignment. Drawing a pretty map. Like some 4th grader. I could have done her job and mine at the same time, from home! I know a lot of things have probably changed since then, but from others I hear a lot of the same. A good friend of mine is an executive for a national company, in charge of the East Coast. While talking about scheduling a trip with some other college buddies he said, " Hell, I could probably not come in for a month and they'd never know it." He used to be self employed and he knows first hand the difference in demands of being self employed vs working for a big company. I'm sure there is a lot in government the same way. On the other hand, they sometimes dump all the work on the most productive guy and he ends up working 75 hour weeks!

[dcarrigg]

Re: Stockman's Point of No Return

On the other hand, they sometimes dump all the work on the most productive guy and he ends up working 75 hour weeks!

Around here we call that 'the curse of the competent.' Small organizations are simply more efficient by nature. Eventually too many people get hired in large organizations who have no discernible duties/skill, but have done nothing wrong and are well liked. I've known far too many people who were paid by big orgs to play golf, as best as I can tell.

[dcarrigg]

Re: Stockman's Point of No Return

100% with you that overpopulation is being ignored and kicked down the road for others to deal with. Its the #1 issue in my opinion and one that is the ultimate cause of most of our other problems. Pollution, wars, oil dependency, and even massive deficits. All directly or indirectly attributable to overpopulation. Relying on "growth" to save us economically will ultimately ruin us all in the end. Its sad that that has become our only hope. Growth.

Individually people can be brilliant; as a group they are no smarter than E. coli in agar. Consume until the end then die off rapidly. The timescale's different, but I do suppose the speed will be swifter than most would guess. The horrible part is that I see no solution coming any time soon. The safest answer to me seems to lie in structuring what one can control around the concept of anti-fragility (to borrow a phrase from Taleb).

[ASH]

Re: Stockman's Point of No Return

The starve-the-beast strategy is an important point.

I read an interesting criticism of "starve-the-beast" that explains why it didn't work, and won't work until the US is no longer able to borrow at low interest rates. The problem is that lowering taxes reduces the 'cost' of government to voters; Econ 101 says lowering the cost at which something is offered will tend to increase 'demand' for it. So, counter-intuitively, lower taxes increases the demand for bigger government.

The main reason we run large deficits is that folks love their federal spending but hate paying taxes. Whether the spending is in the form of benefits or national defense or research or education or pork -- everybody loves their slice of public spending while denouncing the "wastefulness" of the programs they don't use or care about. But so long as the overall cost of this spending is low, voters are more motivated to defend their slice of the pie than they are to take away anyone else's. That puts politicians in a bind, because every area of federal spending has its defenders amongst the voting public. If politicians raise taxes to balance the budget, they'll be voted out of office. If they cut spending to balance the budget, they'll be voted out of office. As long as they have the option to borrow money so that their constituents can have their cake and eat it too, that is the optimal political strategy for staying in office.

Ironically, those of us who would like smaller government should be agitating to raise taxes, and widen the tax base as much as possible, so that the maximum number of voters feel the pain. High taxes and a wide tax base are the only way to make smaller government seem appealing to enough voters to control the size of government. Instead, the "small government" crowd does everything in its power to reduce the cost of government to its citizens, and this only increases demand for more government.

Of course, "starve the beast" will work plenty well if America is ever denied access to credit. But starving the beast all at once would not be pretty.

[Chomsky]

Re: Stockman's Point of No Return

I read an interesting criticism of "starve-the-beast" that explains why it didn't work, and won't work until the US is no longer able to borrow at low interest rates. The problem is that lowering taxes reduces the 'cost' of government to voters; Econ 101 says lowering the cost at which something is offered will tend to increase 'demand' for it. So, counter-intuitively, lower taxes increases the demand for bigger government.

The main reason we run large deficits is that folks love their federal spending but hate paying taxes. Whether the spending is in the form of benefits or national defense or research or education or pork -- everybody loves their slice of public spending while denouncing the "wastefulness" of the programs they don't use or care about. But so long as the overall cost of this spending is low, voters are more motivated to defend their slice of the pie than they are to take away anyone else's. That puts politicians in a bind, because every area of federal spending has its defenders amongst the voting public. If politicians raise taxes to balance the budget, they'll be voted out of office. If they cut spending to balance the budget, they'll be voted out of office. As long as they have the option to borrow money so that their constituents can have their cake and eat it too, that is the optimal political strategy for staying in office.

Ironically, those of us who would like smaller government should be agitating to raise taxes, and widen the tax base as much as possible, so that the maximum number of voters feel the pain. High taxes and a wide tax base are the only way to make smaller government seem appealing to enough voters to control the size of government. Instead, the "small government" crowd does everything in its power to reduce the cost of government to its citizens, and this only increases demand for more government.

Of course, "starve the beast" will work plenty well if America is ever denied access to credit. But starving the beast all at once would not be pretty.

No coincidence that it's precisely when marginal tax rates were massively cut in 1982 that massive government took off in earnest. There were also important cuts in 1964 and 1970 that dropped the top income tax rate (from 91% to 77%, and 77% to 71.5%) that got the ball rolling, but nothing like the takedown of the 1980s.

It's worth noting that America's period of greatest prosperity -- when middle-class families could afford a house, a car, etc., on a single earner's income -- occurred during the 1950s and 1960s, when the top tax rate was 91-92%.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=213

[mesyn191]

Re: Stockman's Point of No Return

Of course, "starve the beast" will work plenty well if America is ever denied access to credit. But starving the beast all at once would not be pretty.

I'm kinda surprised that you seem to be a "starve the beast" advocate or am I reading your post wrong?

I guess Reganomics will never die.

[Chomsky]

Re: Stockman's Point of No Return

I'm kinda surprised that you seem to be a "starve the beast" advocate or am I reading your post wrong?

I guess Reganomics will never die.

I think you misunderstand ASH. He merely is explaining the facts as they are, dispassionately, in the best spirit of rational inquiry.

[ASH]

Re: Stockman's Point of No Return

I'm kinda surprised that you seem to be a "starve the beast" advocate or am I reading your post wrong?

I guess Reganomics will never die.

It sounds like you may be misreading my post.

When I say "starve the beast" will work plenty well if America is ever denied access to credit, I'm stating a tautology. If you can't fund government programs with borrowing (because denied access to credit), and if you don't fund government programs with taxation (the so-called "starve the beast" strategy), then arithmetic says that less government will be funded.

The rest of my post is a market-based explanation for why "starve the beast" did not, in fact, work. If you don't pay for government with taxes, but you are still able to pay for government with borrowing, then the path of least political resistance is to expand government and fund the expansion with borrowing.

[mesyn191]

Re: Stockman's Point of No Return

Alright sorry for the mis-read, you're back on my good guys list. I've met lots of people here in southern CA who state "starve the beast" with no irony, totally destroyed my irony detector.

[ASH]

Re: Stockman's Point of No Return

No coincidence that it's precisely when marginal tax rates were massively cut in 1982 that massive government took off in earnest. There were also important cuts in 1964 and 1970 that dropped the top income tax rate (from 91% to 77%, and 77% to 71.5%) that got the ball rolling, but nothing like the takedown of the 1980s.

It's worth noting that America's period of greatest prosperity -- when middle-class families could afford a house, a car, etc., on a single earner's income -- occurred during the 1950s and 1960s, when the top tax rate was 91-92%.

That's some good historical color. My dates could be off a bit, but I have a hunch that what happened in the 1980's was "the worst of both worlds". High marginal tax rates on the wealthy should create less political pressure to cut government than high tax rates on the more numerous poor and middle class (although high taxes on the wealthy certainly do motivate their political activism, and the wealthy are better equipped to influence politics). What I think happened in the 1980's was a stealth flattening of the tax structure in a nefarious way that defused what should have been the accompanying call for smaller government. The flattening occurred in the form of raising payroll tax rates while cutting the upper income tax brackets, and then using "surplus" FICA to fund general government programs. This shifted the tax burden downward, and broadened the tax base in a big way. However, because of the fiction of the Trust Funds -- and the fiction that FICA would ultimately be tied to individual retirement benefits -- those on the receiving end of the higher taxes didn't complain nearly so much as they would have had their income taxes been raised. They thought they were paying higher taxes specifically -- and exclusively -- for their own direct retirement benefits, and so did not raise general political resistance to government expansion.