Everything costs too much and everybody is wrong about it and who the hell knows how to fix it?

[I Shrugged]

We'd get Abenomics.

[Libertarian666]

If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

I would expect the taps to open at the Federal Reserve, converting a depression into hyperinflation.

[rickb]

If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

I would expect the taps to open at the Federal Reserve, converting a depression into hyperinflation.

Which would ultimately lead to severe deflation.

In the fullness of time, dollars will become worthless. On the other hand, you will ultimately die. Which of these comes first is hard to predict.

[Libertarian666]

If these current financial and real estate bubbles were to pop, and we had another Great Depression, could we at least expect some 1930s style deflation to lower these prices? Or would we have stagflation?

I would expect the taps to open at the Federal Reserve, converting a depression into hyperinflation.

Which would ultimately lead to severe deflation.

In the fullness of time, dollars will become worthless. On the other hand, you will ultimately die. Which of these comes first is hard to predict.

I agree that timing is always the hardest part of prediction.

[LC475]

Since I haven't got an answer yet, I'll say:

For myself, I think that free markets fall pretty clearly into the category of "things which work." A free marketplace is a well-established, mature, indeed ancient technology with a very long track record of achieving particular results. It accomplishes its technological end.

What results / what end?

The participants in said marketplace are able to obtain things they want, by giving other people things those others want. That's the functionality of a free marketplace. Does this sought output, in reality, actually happen in a free marketplace? Indeed. Mission Accomplished!

PointedStick is claiming that the free market must be said to not work due to its failure to provide a different outcome, to wit: it's failure to create or modify a group of humans such that they all act in the correct, intelligent, efficient manner according to him.

But reorganizing society according to PointedStick's preferences (sorry, not trying to pick on you, PS, same applies to any of us, you just were the one who brought it up, so I'll use your name for clarity) and re-molding all humanity into New PointedStickian Man is not actually in free marketplace's job description. It's not in the Scope of Work, not what it signed up for, not at all the intended use case!

[Pointedstick]

Since I haven't got an answer yet, I'll say:

For myself, I think that free markets fall pretty clearly into the category of "things which work." A free marketplace is a well-established, mature, indeed ancient technology with a very long track record of achieving particular results. It accomplishes its technological end.

What results / what end?

The participants in said marketplace are able to obtain things they want, by giving other people things those others want. That's the functionality of a free marketplace. Does this sought output, in reality, actually happen in a free marketplace? Indeed. Mission Accomplished!

PointedStick is claiming that the free market must be said to not work due to its failure to provide a different outcome, to wit: it's failure to create or modify a group of humans such that they all act in the correct, intelligent, efficient manner according to him.

But reorganizing society according to PointedStick's preferences (sorry, not trying to pick on you, PS, same applies to any of us, you just were the one who brought it up, so I'll use your name for clarity) and re-molding all humanity into New PointedStickian Man is not actually in free marketplace's job description. It's not in the Scope of Work, not what it signed up for, not at all the intended use case!

I figured I'd get the biggest pushback from libertarians on the "markets don't work" comment. I know where you guys are coming from because I was one of you until pretty recently. And in fact I agree with you that free markets work if your definition of working is getting people what they want.

Thing is, this makes free markets a means, not an end. We don't actually want a free market; what we really want is to live in peace and prosperity. The market just facilitates that.

But let's not be lazy and assume that what people want is always good for them individually, or broadly good for their society collectively. This is an off-limits subject for libertarianism, which largely uses a 19th century model of the human brain that casts it as a rational calculating machine. People always choose the end that best suits them, see? And when they don't, they rapidly adjust and make better decisions!

Or do they? A few days ago I took a homeless kid into my home and offered him $10/hour and hot meals for honest work to help him get back on his feet. Over lunch, we talked and the truth spilled out: this kid had made all the wrong decisions, repeatedly. Drug and alcohol use, never saving any money, pursuing short-term pleasure over any kind of planning. I think we talked him out of trying to get his hoped-for girlfriend pregnant, thank goodness ("All of my friends are having kids!"). As for his family life: father was an illegal immigrant who under Obama was jailed for some other crime, and deported. His mother rejects him. And then you start to wonder: is this legally-adult human being's brain really capable of being a rational calculating machine?

Once you acknowledge the possibility of mental fallibility, social pressure, chemical dependencies, constant short-term focus, and repeated mistakes, you start to see them show up everywhere, short-circuiting the ability of free markets to bring a lot of people the things that will make them happy. Instead, you start to become attuned to a recurring pattern of people buying things that actually make them poor, unhealthy, and unhappy--and somehow never getting the message. Suddenly cigarette companies lose their moral neutrality. And soda companies. And sellers of chemical dependency-inducing drugs. And advertisers in general. You start to see the ways in which they're all preying on human weakness, as now understood by modern psychology for which anarcho-capitalist free market ideology hasn't been updated. And you start to think more about children and the mentally ill--people whose brains are not physio-chemically capable of making adult-level decisions in some or all circumstances.

At least, that was my journey.

What especially resonated with me about the article was that the in-crisis markets are ones where the outcomes are complicated and far off in the future. How do you really know that a certain house for your family or school for your kids will be the right one? There are just so many variables. It's always inherently a guess--a guess backed by potentially hundreds of thousands of dollars.

But despite it all, I don't really believe in the ability of government regulation to improve these situations. We have reams of history to show us that. Most hurt more than they help, in fact.

That's why it's such a quandary.

[Pointedstick]

Basically these markets need better products, because people have demonstrated their general incompetence in distinguishing bad products from good, or choosing the one that's right for them. If product selection in such an environment is going to look pseudo-random, it's important that there not be any truly terrible products, or products with hidden defects. And it's important that there be enough of a supply of good products.

My feeling now is that diversity and artificial scarcity make these markets break. Respectable English-speaking middle-class-and-higher American citizens with no criminal history (liberals included!) don't want to live around trashy people, foreigners, non-English-speakers, criminals, drug addicts, etc. having a bunch of people like this in your society is toxic. The respectable people move away from them, making some neighborhoods super-desirable which inflates prices in bidding wars, and consigns others to becoming crime-ridden deteriorating wrecks. Essentially it introduces artificial scarcity into real estate markets because there are huge zones that are technically available for habitation, but that respectable people would never consider buying into. And since public schools are neighborhood-based, the effect bleeds into schools.

So you get the phenomenon of these brick architectural masterpieces in Baltimore inhabited by trashy losers and criminals who largely neglect, abandon, and burn down their historic properties, and respectable people who live in particleboard disasters that cost $300,000 and require an hourlong commute--just to live far away from the trashy people. What a mis-allocation of resources.

[Mountaineer]

Basically these markets need better products, because people have demonstrated their general incompetence in distinguishing bad products from good, or choosing the one that's right for them. If product selection in such an environment is going to look pseudo-random, it's important that there not be any truly terrible products, or products with hidden defects. And it's important that there be enough of a supply of good products.

My feeling now is that diversity and artificial scarcity make these markets break. Respectable English-speaking middle-class-and-higher American citizens with no criminal history (liberals included!) don't want to live around trashy people, foreigners, non-English-speakers, criminals, drug addicts, etc. having a bunch of people like this in your society is toxic. The respectable people move away from them, making some neighborhoods super-desirable which inflates prices in bidding wars, and consigns others to becoming crime-ridden deteriorating wrecks. Essentially it introduces artificial scarcity into real estate markets because there are huge zones that are technically available for habitation, but that respectable people would never consider buying into. And since public schools are neighborhood-based, the effect bleeds into schools.

So you get the phenomenon of these brick architectural masterpieces in Baltimore inhabited by trashy losers and criminals who largely neglect, abandon, and burn down their historic properties, and respectable people who live in particleboard disasters that cost $300,000 and require an hourlong commute--just to live far away from the trashy people. What a mis-allocation of resources.

Good point, but soon saving old brick homes in Baltimore or trashy neighbors will not be at the top of the priority list. I'm not trying to divert from the central topic of this thread but this somehow seems relevant: I just heard a discussion of demographics that was eye opening. The discussion mentioned that the world population will be just over 9 billion in 2050 with about 7 billion of us over the age of 65 (due to low production rate of babies). Given the normal retirement age of around 65, and the fact that in most of the first world procreation is less than the replacement rate to sustain the population at current levels, that means 2 billion active workers will be supporting 7 billion oldsters .... that does not seem to be a realistic scenario to me but regardless, it appears we are headed for a big heap of trouble. The thrust for minimizing population by a variety of methods over the last 50 years or so (birth control, abortion, euthansia, the shift in focus to environment importance vs. people, etc.) is likely to have some dire, unexpected consequences for many of us. Think of it this way, count up all the people required to put food on your table - farmer, maker of farm equipment, supplier of farm equipment fuel, truck driver, tire maker, road and bridge builder, grocery store dock unloader of the food, grocery store shelf stocker, cashier, auto maker and parts supplier to get the food to your surburban McMansion that is heated and cooled by power plant workers, etc. About half or more of those workers aren't going to be there in another 30 to 40 years just due to demographics. Should we: learn how to farm, move to the country, buy a few acres while you still can, move to Africa where the population is still growing at or above replacement rate and hope they stop corruption and murder of outsiders as well as insiders, stock up on guns and ammo, pray, stick head in the sand?

[Libertarian666]

I figured I'd get the biggest pushback from libertarians on the "markets don't work" comment. I know where you guys are coming from because I was one of you until pretty recently. And in fact I agree with you that free markets work if your definition of working is getting people what they want.

Thing is, this makes free markets a means, not an end. We don't actually want a free market; what we really want is to live in peace and prosperity. The market just facilitates that.

But let's not be lazy and assume that what people want is always good for them individually, or broadly good for their society collectively. This is an off-limits subject for libertarianism, which largely uses a 19th century model of the human brain that casts it as a rational calculating machine. People always choose the end the best suits them, see? And when they don't, they rapidly adjust and make better decisions?

Or do they? A few days ago I took a homeless kid into my home and offered him $10/hour and hot meals for honest work to help him get back on his feet. Over lunch, we talked and the truth spilled out: this kid had made all the wrong decisions, repeatedly. Drug and alcohol use, never saving any money, pursuing short-term pleasure over any kind of planning. I think we talked him out of trying to get his hoped-for girlfriend pregnant, thank goodness ("All of my friends are having kids!"). As for his family life: father was an illegal immigrant who under Obama was jailed for some other crime, and deported. His mother rejects him. And then you start to wonder: is this legally-adult human being's brain really capable of being a rational calculating machine?

Once you acknowledge the possibility of mental fallibility, social pressure, chemical dependencies, constant short-term focus, and repeated mistakes, you start to see them show up everywhere, short-circuiting the ability of free markets to bring a lot of people the things that will make them happy. Instead, you start to become attuned to a recurring pattern of people buying things that actually make them poor, unhealthy, and unhappy--and somehow never getting the message. Suddenly cigarette companies lose their moral neutrality. And soda companies. And sellers of chemical dependency-inducing drugs. And advertisers in general. You start to see the ways in which they're all preying on human weakness, as now understood by modern psychology for which anarcho-capitalist free market ideology hasn't been updated. And you start to think more about children and the mentally ill--people whose brains are not physio-chemically capable of making adult-level decisions in some or all circumstances.

At least, that was my journey.

What especially resonated with me about the article was that the in-crisis markets are ones where the outcomes are complicated and far off in the future. How do you really know that a certain house for your family or school for your kids will be the right one? There are just so many variables. It's always inherently a guess--a guess backed by potentially hundreds of thousands of dollars.

But despite it all, I don't really believe in the ability of government regulation to improve these situations. We have reams of history to show us that. Most hurt more than they help, in fact.

That's why it's such a quandary.

It's not a quandary at all other than in your mind.

The State is composed of human beings just like other human beings, with all the same fallibilities and biases. Except of course that there is an incentive for people who want to use force against others to join the State, so in fact they are worse on average than the general population.

So it is logically impossible for the State to improve circumstances, and in fact (as you have noted) it makes things worse.

Thus, anarcho-capitalism, which provides the maximum of freedom for people to live their own lives, however good or bad they may be at that, is the best solution.

Q. E. D.

[WiseOne]

I'm not sure the demographics are going to be that dire, certainly not in the US. Don't forget that life expectancy in the US is decreasing, and the fertility rate remains high among the lower classes (which may or may not be helpful).

I agree with PointedStick's message about advertising to vulnerable populations skewing the free market in some areas. That's long been a liberal viewpoint that I have a lot of sympathy with: outlawing sodas is meant to counteract the relentless and highly financed ads, directed to kids who don't understand how they're being manipulated. My main objection here is that making those products illegal only means that you're going to further complicate a tough situation by dragging in police, courts and jails. It won't actually change behavior.

I have long been in favor of banning certain types of advertising, most especially direct-to-consumer pharmaceuticals. It would be optimal to counter the ads with public education campaigns, similar to what was done so successfully for smoking, but governments just don't have the money to outpace the advertisers. I figure that advertising bans plus some education is the safest and least intrusive way to deal with problems. For instance, my division has banned drug reps from our office and patient areas. Having them hanging around MD's like fleas is an insidious form of advertising that seriously needs to stop.

[LC475]

I figured I'd get the biggest pushback from libertarians on the "markets don't work" comment. I know where you guys are coming from because I was one of you until pretty recently. And in fact I agree with you that free markets work if your definition of working is getting people what they want.

Of course! That's all I'm saying. Instancing a free marketplace does solve a problem, just as installing a word processor will solve a problem. A word processor will not enable you to create accurate three-dimensional models of objects. For that, you would need a different tool, such as a CAD program (or a lump of clay). A free market does not solve every problem.

Now I'm with you. I'm with you far more than you know. I too am a long-time libertarian, but I too have over the last few years been gradually... I think of it as moving onward, upward and beyond libertarianism. I still am one; I still accept the insights and truths afforded by that school of thought, so full of brilliance and logical rigor. But there are other things going on in our civilization, things even deeper, things more fundamental, things that even transitioning to a fully libertarian political solution will not solve.

Thing is, this makes free markets a means, not an end. We don't actually want a free market; what we really want is [XYZ, something that I want]

Are you sure? Is that what "we," as in everyone, wants? Demonstrated preferences, right?
Ideals and mission statements, beloved bromides
Dwell loftily and legion in the clouds;
While where the vulcan meets the graded tar, lo:
Soda shells and cigarette butts abound.
Which preference is more real? What do people ("we") really want?

But let's not be lazy and assume that what people want is always good for them individually, or broadly good for their society collectively. This is an off-limits subject for libertarianism, which largely uses a 19th century model of the human brain that casts it as a rational calculating machine. People always choose the end the best suits them, see? And when they don't, they rapidly adjust and make better decisions?

Oh, absolutely! It's not! I, for one, certainly do not assume that "what people want is always good."

Fundamentally, absolutely foundationally, at the deepest level: a society is its people. If the people are good, it will be good. If lazy, then lazy. If debauched, then debauched.

Or do they? A few days ago I took a homeless kid into my home and offered him $10/hour and hot meals for honest work to help him get back on his feet. Over lunch, we talked and the truth spilled out: this kid had made all the wrong decisions, repeatedly. Drug and alcohol use, never saving any money, pursuing short-term pleasure over any kind of planning. I think we talked him out of trying to get his hoped-for girlfriend pregnant, thank goodness ("All of my friends are having kids!"). As for his family life: father was an illegal immigrant who under Obama was jailed for some other crime, and deported. His mother rejects him. And then you start to wonder: is this legally-adult human being's brain really capable of being a rational calculating machine?

Smart people have a problem. You're smarter than pretty much everyone around you. Do not take this as flattery, it's just a fact. I am, too. And (like everyone else) we tend to basically assume that everyone thinks more or less in the same way -- that is, on the same level -- as we do. That is not the case. You would likely be shocked at just how unintelligent a sizable percentage of those around you are. There have been studies done wherein a representative population is given a short sports article to read and then asked a few basic questions about it. They can't do it. Many people cannot answer even one. Tell smart people this and they cannot believe it. They're incredulous. They just cannot believe that 20%, 30% of the people around them are operating on a mental level so foreign to them.

But they are.

Once you acknowledge the possibility of mental fallibility, social pressure, chemical dependencies, constant short-term focus, and repeated mistakes, you start to see them show up everywhere, short-circuiting the ability of free markets [anything!] to bring a lot of people the things that will make them happy.

Right?

This is not a unique problem to the free market, right?

And, as per my previous comments, this is not even a problem that the free market has. Not its problem. The free market doesn't address it. Why would anyone expect it to? All a free marketplace is is a bazaar. Just a big open area full of tents and booths and hawkers and people coming from all around, milling around, trying to sell this year's crop, or buying some butter. It's not a thing that's going to make people better, lift them up to new heights. It's sure as shootin' not gonna make 'em smarter. That's not in its design. It's just a bazaar.

Instead, you start to become attuned to a recurring pattern of people buying things that actually make them poor, unhealthy, and unhappy--and somehow never getting the message. Suddenly cigarette companies lose their moral neutrality. And soda companies. And sellers of chemical dependency-inducing drugs. And advertisers in general. You start to see the ways in which they're all preying on human weakness, as now understood by modern psychology. And you start to think more about children and the mentally ill--people whose brains are not physio-chemically capable of making adult-level decisions in some or all circumstances.

Look, they're all like children. Every one of us is like a child to someone (God, if no one else). People have different IQs. They really do. And that intelligence level is pretty much set. So, let me sum up your problem for you:

They're not that smart.

You can't make them smarter.

That's it! In a nutshell! They're going to keep buying those central air conditioners and those college edumacations and making themselves into walking chemistry experiments. Unless......


The solution is elitism. Our civilization rose, as did every civilization before it, as a hierarchical structure topped with a group we can call the "Natural Elite." People are different. All men are not the same. Some people are better than other people. Just a different stock, a better breed. Higher intelligence. Greater wisdom. Stronger courage. Longer foresight (reminds me of what you said: "What especially resonated with me about the article was that the in-crisis markets are ones where the outcomes are complicated and far off in the future." Lower IQ people cannot, or at least typically do not, think with this kind of time horizon.). Essentially, they have more productivity, planning, industriousness, and inventiveness, enabling them to gobble up all the farms around them, thus becoming lords. And also, in a harsh climate they will have more surviving kids, thus enabling the long, slow process of improving the genetics, and thus the society.

These elites were in a position of grave responsibility and at least the good ones took it very seriously. (Nice thing was, the more seriously you took it, the more of a good one you were, the more successful your fiefdom/principality/duchy/kingdom/bishopric/city-state tended to be, so there was a positive feedback loop.) They had to be moral. They had to be respectable. They had to be, in a word: Noble.

And so it was their job, yes, to know better. To set a good example, to chart a righteous course for their people, and to help decisions to be made that would be good and wise in the long, very long, term.

This natural, wholesome elitism is not incompatible with liberty. This was the very incubator in which liberty arose. It seems, in fact, to be the case that it is indispensable to it. In the long run. Yes, it is actually egalitarianism which is incompatible with liberty! And with civilization itself, at least any civilization I would find halfway interesting to live in.

[I Shrugged]

PS, can you point to any social problem that has been fixed by people following your current line of thinking?
And fixed without big seen or unseen "costs"?

Also, who draws the lines, once you start determining what is good for people and what is bad?

We all go through this phase as some point, so I'm not looking to bash your thinking. I went through it many times, and I finally came out the other side where I am now. Well, saying finally is presumptuous on my part. We all evolve.

I said years ago that once health care costs are socialized, then you have to know government will come for your bad habits. The same applies to other areas of socialized payment. My take is, if someone wants to smoke, that's their problem. That's assuming I don't have to pay for whatever happens.

IMO: Ride with no helmet, knock yourself out!

That is where your thinking is leading. Smart well-intentioned people will clamp down on the poor saps who don't know what's good for them. What could possibly go wrong?

[Pointedstick]

I appreciate the detailed reply, LC475. It sounds as if we're in agreement on about 99% of these things. I too consider myself a "post-libertarian," and I haven't rejected their important insights about markets and incentives. I just don't think that fully embracing those things alone will make a great society. That would certainly solve a lot of problems, but I think it would also create or exacerbate others--especially for the significant fraction of the population that's just not that bright or thoughtful. They need guidance. They need to be shown the way. They need certain things done for them, for their own good.

In a lot of ways, that was the beginning of the end for me. It was easy to be a libertarian living in the Lake Wobegone bay area, where everyone's super smart. But as life continued, and my sister started dating some real duds, and I moved to New Mexico, and I got out of the bubble, yeah, it started to become abundantly obvious that more choice and freedom just won't actually help some people. And if they get it, systemic forces will be unleashed that may actually make some things worse as a consequence of their poor decision-making and ease of being exploited by smart people without a moral compass.

We're largely in the same place regarding egalitarianism and elitism. Damn, you're making me want to have a third child.

[LC475]

I just don't think that fully embracing those things alone will make a great society.

Right.

you're making me want to have a third child.

Now that, will!

Do your part, citizen!

[Xan]

I moved I Shrugged's reply from the wrong topic over here, and deleted PS's suggestion of re-posting. Carry on!

[LC475]

PS, can you point to any social problem that has been fixed by people following your current line of thinking?

(you may have meant to address this to me, although we're both saying largely the same thing so it doesn't matter) All of them!

Yes, all of them!

Think of something that could be worse, and the reason it's not worse is that smart people over many, many, generations and hundreds, really thousands, of years, managed to engineer and finagle a system wherein humans are pressured into behaviors highly unnatural to them and not necessarily what deep down in their lizard brain they'd like to be doing. That system is called civilization.

IMO: Ride with no helmet, knock yourself out!

I absolutely agree, of course, but this is a benign and trivial example. There are no bad, nor important, consequences to society to have people engaging in activities (allegedly) putting them at increased risk of head trauma. Being in some occasional mild physical danger is probably psychologically healthy, for most of us.

That is where your thinking is leading. Smart well-intentioned people will clamp down on the poor saps who don't know what's good for them. What could possibly go wrong?

There need be no clamp down. Indeed, as PointedStick has PointedOut, clamp-downs back-fire.

The elite have the power. They run the society. That's what it means to be powerful. They have the cash, they have the connections, they make things happen. If, unlike our current corrupt, detestable elite, they are also Noble, they can make conscious decisions to make certain things happen, or not happen, in their society.

If you have, say 100 billion dollars, you can get a lot done. No clamping needed. If, say, none of the billionaires in the world thought there ought to be a pornography industry: boom, no pornography industry. Now there would still be some pornography, utopia is not an option, but would you be able to get it in a Marriott? No, because Mr. Marriott just plain doesn't want it. You'd have to go to some seedy, marginal place. And pornography is one of the most difficult examples I could have chosen, because it is such a deep-seated human drive and because you probably can't ever totally get rid of it. Other changes would be much easier. Eliminating soda pop and cigarettes? Child's play. Look at all the other behaviors we've eliminated over the millennia. So much of social behavior -- virtually all of it -- is rooted not in enforced decrees, but in convention. Change convention? Change the culture? Change the world.

[Pointedstick]

PS, can you point to any social problem that has been fixed by people following your current line of thinking?

(you may have meant to address this to me, although we're both saying largely the same thing so it doesn't matter) All of them!

Yes, all of them!

Think of something that could be worse, and the reason it's not worse is that smart people over many, many, generations and hundreds, really thousands, of years, managed to engineer and finagle a system wherein humans are pressured into behaviors highly unnatural to them and not necessarily what deep down in their lizard brain they'd like to be doing. That system is called civilization.

Bingo. Here's an example:

In the town I inhabit, my wife can go out in public at any hour of the day, alone or otherwise, and not be catcalled or harassed. At all. Ever. Her sister recently got back from two and a half years in Ethiopia with the Peace Corps, and reported the opposite: constant street harassment, of her and other women. Often by children, who traveled in packs like wolves, accosting the weak as if for sport. Needless to say, few women go out in public alone, even during the day.

This doesn't involve the market: no products or services are bought, sold, or consumed. It also doesn't involve the government: no laws are violated, because it's not illegal to beg, insult, or non-threateningly harass people in either country.

But it does involve culture. In my town, this kind of rude behavior is not tolerated--enforced through social conventions. In Ethiopia, it is, to the detriment of half the adult population. I'm not a woman, but regardless, I know where I'd rather live. A culture that tolerates public harassment is just plain uncivilized, and a thoroughly unpleasant place to live in once you've tasted the fruit of freedom and choice.

[I Shrugged]

OK, so most of you are smarter than me, and you are making me think. That's good.

So I like simple, measured approaches to things. I have trouble thinking of any tax as good. But would a consumption tax (GST etc) be effective in curbing consumerism? Remove the income tax (haha I make myself laugh), and raise the prices of everything. So far, so good? Then what about the poor? Then again, they're bad consumers too. But I know, you can't do that to them, so then there must be adjustments.

Any indication the GST serves to reduce consumerism?

[I Shrugged]

Another thought. If you look at charts for Americans taking on debt, and buying cheap foreign goods, and for inflation, the line always turns north right about when Nixon shut the gold window and made the dollar truly fiat. Does that explain how we got here? If so, that should tell us something about how to change.

I know, that genie is never being put back into the bottle.

[Pointedstick]

Another thought. If you look at charts for Americans taking on debt, and buying cheap foreign goods, and for inflation, the line always turns north right about when Nixon shut the gold window and made the dollar truly fiat. Does that explain how we got here? If so, that should tell us something about how to change.

I know, that genie is never being put back into the bottle.

I'm starting to agree! But yeah, snowflake pigs flying in hell before the gold standard comes back.

And yes, I heartily support a consumption tax to replace the income tax. The FairTax strikes me as an excellent idea. It includes "prebate" which amounts to a monthly check covering the tax on an average basket of goods for a low-income person, also giving it an element of universal basic income.

[Maddy]

Unfortunately, a consumption-based tax would not "replace" the income tax for some time to come because it would be taxing the very same money upon which the income tax has already been paid. Even assuming a substantial "prebate," that would be a real screw job for retirees and others who have been provident enough to save for the future. Their money would be taxed both coming and going.

I once did a back-of-the-napkin calculation of what would be left in such a scenario, assuming income derived from self-employment (only because I was self-employed at the time). I don't recall the exact numbers, but the result wasn't pretty. They damned near took everything.

[Pointedstick]

Unfortunately, a consumption-based tax would not "replace" the income tax for some time to come because it would be taxing the very same money upon which the income tax has already been paid. Even assuming a substantial "prebate," that would be a real screw job for retirees and others who have been provident enough to save for the future. Their money would be taxed both coming and going.

I once did a back-of-the-napkin calculation of what would be left in such a scenario, assuming income derived from self-employment (only because I was self-employed at the time). I don't recall the exact numbers, but the result wasn't pretty. They damned near took everything.

I guess it could be phased in over a period of years to combat this. But keep in mind that with no more income or capital gains taxes, retirees who are financially literate enough to be living off their own savings would see more of their dollars, in an absolute sense. Also, the tax is only levied on new goods, not used goods. So a canny, financially literate person could pocket the prebate as additional monthly income and buy used as much as possible.

I'm not saying it's a perfect tax system, but I just did my income taxes a few days ago and it always reminds me of the status quo's insanity and perversity. Every change hurts someone. In my book, that's a poor reason to stick with something everyone knows is terrible.

[Pointedstick]

Hmm, maybe you're right, Tenn. I'll admit it's a tempting narrative for me, but if the data can't support it, then I guess it's something else.

[I Shrugged]

Here is the one I most recently came across. As WiseOne would remind us, correlation does not equal causation. But correlation is as good as we are going to get in this kind of thing:

[I Shrugged]