Well said, David. You are the only sensible voice in the Parliament. Perhaps if you keep explaining the basic principles of political economy, the socialists will get it eventually, after they have sponsored another hundred years of corrupt wasteful dysfunctional bureaucracies dealing in political privilege, which is what socialists call "progressive".

"Government debt amounts to a decision on our behalf to have the next generation pay for today’s spending."

However, the "on our behalf" bit pressuposes the representative theory of government, which is indefensible on the ground that it's demonstrably wrong:
see "Unrepresentative Government": http://economics.org.au/2010/08/unrepresentative-government/

The truth is, government debt amounts to a decision on behalf of the politicians who benefit from the decision to force the next generation to pay for today's government's sowing of privilege and political favouritism.

"Last year Australia Post made a $350 million loss, but still paid its top 17 staff an average of $800,000 each."

That's appalling, isn't it? And then the creeps who support this arrangement plead that it's necessary to help the poor. Nobody could conceivably send or deliver a package, apparently, without - tadaaaa - the government to do it.

You are 100% right David although you saw what the socialist media did to Abbott and Hockey when they wanted to charge 7 bucks to see doctor. The pool of people sucking on the public purse has become so big that balancing the budget and being elected is almost impossible. The abc will make sure of that. That are billion dollar plus suckers. Those on the renewables fraud also will ensure we stay in the red.

Yes, we must crack down on the waste of space poor to protect the interests of the wealthy, the highly profitable banks and ultra generous tax breaks for the top end super! Or those in receipt of generous sit down money for polishing government leather! You've nailed the problem David!? Now what is the final solution? Hmmm.
Alan B.

David, runner and Jardine are 100% wrong on this.

Firstly, governments should take into account the macroeconomic effects of the decisions they make. Right now the economy needs stimulus so the government should be borrowing more. And just trying to balance the budget harms the economy when the private sector is weak. Taking more money out of the economy (or not putting as much in) reduces the opportunities for the private sector to make money, hence it reduces tax revenue. So everyone's worse off and the budget balancing attempt would fail anyway.

Secondly, the claim that "Government debt amounts to a decision on our behalf to have the next generation pay for today’s spending" is wrong. The next generation is no more obligated to pay off the government's spending than this generation is. Nor is the generation after it, or any specific generation.

Thirdly, the government should be working to give us the best value for money rather than chasing some short term financial objective. They should be investing in the things that make the nation more productive. Do you really think there's nothing they can do that's better value than paying down debt?

I should stress here that paying down debt DOES have a value: the same value as running (and banking) a surplus would if we had no debt: it enables interest rates to be cut without increasing inflation. And lower interest rates enable businesses to profitably invest more in the things that make them more productive. But right now interest rates are at record lows, but the government's still pursuing false economies like Fraudband. The idea that there's nothing it can do that's better value than paying down debt is laughable.

Yes. Governments have to the balance the books just the same as the rest of us do. It is getting harder for the rest of us to do that, though, because stupid politicians just don't get it.

Speaking of the ridiculously over-paid public servant and CEO of Australia Post, I heard him him refer to "our business" on radio last weak, when he was being asked about his failure to deliver. No public utility is a business: it is supposed to be a public, essential service, covering its costs, but not looking for profit at the expense of taxpayers.

Rhostry,

Thought you had disappeared, but seems that you have been masquerading as Alan B. all the time. I don't know what your game is, but you aren't very good at it, using both monikers on the one post as you have.

Get rid of the states for a start.

Real sovereign governments issue a currency. While there are unused resources of either labour or other productive facilities the sovereign government can spend by crediting accounts to which it owes payment for work or goods supplied and debiting its account with the central bank which it owns.

The money so created will wend its way through the economy and end up as savings in the hands of the private sector. Those savings will be with a financial entity as reserves and eventual be spent buying bonds issued by the sovereign government or its agents.

It is an economic fact that if the foreign sector is in balance the private sector can only increase its financial assets to the exact extent of the sovereign government debt.

The state governments are not sovereign in currency and are no different to the PIGGS in the Euro system.

Australia needs to re-establish the Loans Council.

A perfect example of state government stupidity is the new NSW trains decision. Building trains in Australia saves the sovereign government from paying unemployment benefits and it also collects tax from the employees who become employed building trains and supplying train parts.

Instead the NSW Government owes money to finance entities. No wonder the banks are so profitable.

The real limit on a sovereign government is not money and it does not need to borrow money to spend. The real limit is full employment and a shortage of other resources and the consequent likelihood of inflation.

Pretty much on the money there David, but perhaps you need to explain to those of Aiden's line of thinking, that you can't generate wealth by spending money you don't have, particularly on things you can't make an immediate profit on.

Even Rhrosty has it almost right. We should be cracking down on the poor BY CHOICE. Those who won't do anything to help themselves, & wont do the work that is available.

There should never be a cent of unemployment benefits paid to anyone where pack packers are earning a good income picking fruit. If they won't take what's offering, they should not get anything.

However it is the ridiculous higher education area that we have the biggest waste. Expanded way beyond it's usefulness. Totally useless study by below average people should be stopped, & the cost of other study raised immediately. Far too many are having a holiday on the taxpayer at universities, especially the B grade lecturers & the host of hangers on that fill the halls of academia.

An even better place to start is in the land of reality.
Follow the link http://theopenbudget.org/ to the interactive pie chart of where our money goes

Hasbeen, rather than asking David (who's probably not here) to explain it, why don't you try explaining it yourself? And while you do so, examine the validity of your own assumptions.

Why can't the government spend borrowed money to make money? After all, the private sector does it all the time. The mining companies typically borrow huge amounts.

Do you comprehend that when the government spends money employing people, it gets the wealth of what they produce, and it reclaims most of the money through the tax system?

What I really can't understand is why you're so eager to get Australians to do low value work, but so disparaging of the one thing that does most to enable Australians to do high value work. Do you want Australia to become a third world country?

Right on the ball, Hasbeen both on useless education for people who should get a job, and the stupidity of continued borrowing for the everyday running of the country, which is what we have come to. Getting rid of the debt is the first priority. No exlanation needed.

Go Senator for Gunz!

Reckon we blokes should have tax breaks for our gun clubs, justice commandos for rigteous action and hunting.
- Easier access to automatic weapons including one GPMG* to shoot back in each school and other public places.

More gunz so we don't have to waste our tax money on Police Forces and no Army.

* General Purpose Machine Gun, 7.62mm preferably, tho 5.56mm is adequate.

ttbn, if anyone else had said that, I'd've assumed they were being sarcastic.

Good article David.

I think our answer lies in our super. What I mean by this is that we should bite the bullet and stop peoples super being given to others to manage and have the government, overseen by a private board, control our super and use it for infrastructure.

While I accept some like myself at ten years pre retirement will loose, we have to have some losers to have a win in the long term.

The long term gain will be retention of all future assets with dividends/profits going towards retirement pensions on a 'as contributed basis' meaning the more you invest in super, the greater your retirement income.

Of cause it would be far more complicated than this, but the reality is that if we continue down the garden path, we will loose.

Can someone please explain to me why those on the right are so opposed to the government making long term investments?

Plantagenet,

Good lad, you've been studying up on guns!!
You seem to kndw now what an automatic weapon is; and given up on the "Adler" semi-automatic, lever action repeating rifle.
Congratulations.

How about this process;
At the next budget we just repeat last years budget except all
expenditure is reduced, say, 5%.
Problems in that of course, but there are problems anyway.
Main one, politically, of course is pensions.
Perhaps some pensions could remain unchanged, but other welfare payout
amounts reduced by more than say, 5% by means tightening entitlement.

If we don't achieve this one way or another, it will be enforced by a
much more brutal economic process called collapse.

Observe Venezuela !

Aidan

When you have understood, and can correctly represent, the economic calculation problem, you will be intellectual qualified to express an opinion on this topic, and not before.

Until then, you simply don't understand what you are talking about.

Both you and Foyle are displaying a creationist superstitious belief that is merely circular. Being 'sovereign' - an expression that Foyle does not define - does not confer immunity from the laws of physics, logic or economics.

All socialism is merely squalling for the teat, a belief in magic pudding, a belief in benefits without the need to confront them with costs to work out whether the expenditure is worthwhile, in terms of what had to be sacrificed to obtain it.

It is easy to refute your economic argument. All I need to do is ask you to prove the objective criterion by which you judge whether government has done
1. too much,
2. too little, or
3. just the right amount
of inflating the supply of money or money substitutes.

If we ignore the costs, anything will seem beneficial, and that is the top and bottom of your intellectual methodology: real kindergarten stuff.

Thanks Is Mise

35 years ago I fired most of the military weapons then available.

SLRs, M16s, F1 submachineguns, chucked grenades.

Also M60 GPMGs, prone and from the hip, like your hero.

Bazz,

Arbitrary spending cuts don't lead to greater efficiency, they lead to false economies.

The main cause of Venezuela's problems is its fixed exchange rate against the US dollar. When the price of its main export (oil) plummetted, so did its export revenue. But still the government pretended the Bolivar was worth as much as before.

Australia is TOTALLY IMMUNE from collapse, as we have a floating currency. If the price of our main exports plummets, the market devalues our dollar, which boosts our other exports and everything is OK again.

If you still doubt we're totally immune from collapse, try to contrive a scenario where you think it could happen, and I'll explain why it can't.

_____________________________________________________________________________

Jardine,

Your intellectual snobbery does you no credit. In fact it's downright hypocritical when you don't even understand what financial sovereignty means! Dismissing arguments as superstitious, creationist or even circular fails to hide the lack of objective arguments you have against them.

And for the record, financial sovereignty is the unconstrained ability to issue the currency you deal in.

Nothing I have said contravenes the laws of physics, logic or economics. But I hope you realise economic value is not physical attribute, so can theoretically grow for ever? If you think something I say is illogical, tell me and I'll either accept it or explain the flaw in your assumptions or reasoning. And I make no apologies for contradicting economic conjecture to which you've erroneously ascribed law status.

Your comments about socialism seem to indicate you haven't even tried to understand it. Of course removing obstacles to high value work has costs, which typically manifest as a small drop in currency value. Unless the strategy's a total failure, it will only be a short term dip, and could even be mitigated by speculators. The social benefits alone are usually worth the cost, but the economic benefits are much higher. It is literally the difference between first and third world countries.

Your "easy to refute" comment is rather incoherent and ambiguous. What exactly is it you want me to prove?

Aidan

> What exactly is it you want me to prove?

I just told you.

A. Show us that you have understood, and can correctly represent, the economic calculation problem.

B. What is the objective criterion by which you judge whether government has done
1. too much,
2. too little, or
3. just the right amount
of inflating the supply of money or money substitutes?

Some of me mates av been asking questions:

Just regarding the possible imminent demotion of Senator Leyno's Senate colleague Labor Senator Sam Dastyari.

Note on:

= 26 August 2016 I flagged (at http://forum.onlineopinion.com.au/thread.asp?article=18476#328355 ) the habit of Labor members of Parliament receiving Chinese money including travel money:

"...Posted by plantagenet, Friday, 26 August 2016 12:21:23 PM
Yeah, your right Max. Talk about Kevin Rudd sacking a Labor (that is ALP) Minister who (Rudd believed) got too close to China.
On account of undeclared trips to China paid for by Chinese...? see http://www.onlineopinion.com.au/view.asp?article=8745
If anything Labor's pretensions to comradely Internationalism gets Labor Ministers into trouble http://www.smh.com.au/national/defence-leaks-dirt-file-on-own-minister-20090325-9ahq.html?page=-1 ".

The above was 5 days before the Chinese money to Senator Sam Dastyari Affiar become public, on:

= 31 August 2016
http://www.abc.net.au/news/2016-08-30/senator-sam-dastyari-under-fire-after-chinese-donor-foots-bill/7799608 .

Planta the Prescient? Maybe!

The first few posters on the forum would be well advised to go and study how money gets created and and ask themselves the question, who gave the banks the power to create money out of thin ai?

Similarly, they would well advised to ask why did the govt not reserve for us, through themselves, the right to create money out of thin air just like banks do and use create all the money they need for the own purposes.

Purposes such as all those infrastructure projects that "built Australia? during the 1940-1970's, money for the injection of the fortnightly 'economic stimulus package' which govt bounce through the bank accounts of the unemployed, pensioners and parents etc, straight into the local economy.

I bet the same people who attack welfare for individuals dont even know about corporate welfare because the lady or the man on TV has not told them about that yet so they dont even know about that do they?

Alas. Too many typos. So, to recap:

Regarding the possible imminent demotion of Senator Leyno's Senate colleague Labor Senator Sam Dastyari http://www.abc.net.au/news/2016-09-06/sam-dastyari-apologises-for-chinese-bill-deal/7819464 .

Note that on:

= 26 August 2016 I flagged (at http://forum.onlineopinion.com.au/thread.asp?article=18476#328355 ) the habit of Labor members of Parliament receiving Chinese money including travel money:

"...Posted by plantagenet, Friday, 26 August 2016 12:21:23 PM
Yeah, your right Max. Talk about Kevin Rudd sacking a Labor (that is ALP) Minister who (Rudd believed) got too close to China.
On account of undeclared trips to China paid for by Chinese...? see http://www.onlineopinion.com.au/view.asp?article=8745

If anything Labor's pretensions to comradely Internationalism gets Labor Ministers into trouble http://www.smh.com.au/national/defence-leaks-dirt-file-on-own-minister-20090325-9ahq.html?page=-1 ".

The above was 4 to 5 days before the Chinese money to Senator Sam Dastyari Affiar became public. The Dastyari Affair hit the airwaves:

= 30-31 August 2016
http://www.abc.net.au/news/2016-08-30/senator-sam-dastyari-under-fire-after-chinese-donor-foots-bill/7799608 .

Planta the Prescient? Maybe!

Jardine,

I was asking you to clarify the questions rather than restate them. You haven't, so don't be surprised if the answers don't satisfy you.

The economic calculation problem is the problem of how to allocate resources to production. I don't now why you bother asking, though, as it's of very limited relevance in its original form; virtually nobody nowadays wants central planning to completely replace markets.

Interest rates are the primary criterion for judging whether the money supply is expanded too much, too little or the right amount. The unemployment rate is a secondary criterion, along with related factors such as the employment rate (as many people are not actively seeking work at the moment but would work if more work were available) and the underemployment rate (as some part time workers would prefer to have more work). And I'm deliberately not making a distinction between government and private sector expansion of the money supply, as it's the aggregate that's important, and government actions influence private sector decisions.

The RBA's inflation target of between 2 and 3% on average is usually adequate, but effects on unemployment and employment need to be taken into account. For example, if there is a supply shock, it's better to put up with a bit more inflation for a while than to have widespread unemployment. Conversely the inflation rate remains consistently below the target, adjusting the target downwards makes sense if we're near full employment in all areas, but not if we're not. And if you think that's insufficiently objective, that's your problem not mine.

AGENT OF INFLUENCE?

Probably not yet. Potential?

Further to http://forum.onlineopinion.com.au/thread.asp?article=18497&page=0#329047

See "Agent of Influence" definition: http://en.wikipedia.org/wiki/Agent_of_influence

Aidan

Can’t you see that saying “interest rates” does not provide any objective criterion whatsoever?

That’s like saying, if I ask you by what objective criterion you know whether you are paying too much for something, like a car, you reply “prices”.

You’re begging the question.

Similarly, expressions such as “a bit” and “usually adequate” do not, of themselves, provide any objective criterion. I can’t understand how you can’t understand that.

Can’t you see that, if one’s mere arbitrary opinion suffices as qualification of an economic proposition, then everyone else is entitled to the same methodology as against you, and we will have 7 billion different opinions on what action government should or should not take, and all those opinions will be equally valid according to your methodology? You are displaying a failure to understand the very concept of economics.

Your problem is not solved by your referring off to the RBA’s “inflation target”, because that is just begging the question, which is whether government's inflation target is justified.

Therefore thank you for openly confirming that your method is illogical, and that I am justified in saying that it is, and that you do not understand what you are talking about.

Thank you also for openly admitting that you cannot correctly represent and do not understand the economic calculation problem. This means you are not qualified to express any economic opinion in favour of any kind of economic central planning.

Read back what you wrote about the economic calculation problem, and actually *think* about what you’re saying. There is a glaring logical defect in your process of reasoning about the economic calculation problem. Can you see what it is? I should not have to point it out to you.

You and Foyle have obviously learnt somewhere that “economics” just means a jumble of arbitrary assertions backed up by blind faith in the supposed ability of the State to create net economic benefits for society by manipulating the supply or price of money or anything else. When this belief is questioned, you just give us a welter of question-begging in reply.

If you have ever debated a fundamentalist Christian on their claims about God, you will notice that your intellectual method is exactly the same as theirs. You simply assume before the discussion's outset, without any explanation or definition, the existence of an all-knowing well-intentioned moral and pragmatic superbeing. Then when challenged to prove it, you simply retort the same circular basal assumption in your own favour. Endlessly. Thus you hold your circular beliefs as complete proof and immunity against any critical inquiry.

This is what you’ve done above: assume the validity of central planning of something – interest rates - and when challenged, offered a requirement that I share your assumption of the validity of the central planning in question – “the RBA’s inflation target”. AS IF this is some kind of proof!

If you can’t see, or don’t care, that that’s illogical, that’s your problem, not mine.

All I have to do to prove, according to your own standard, that you are “100% wrong”, is merely say “interest rates”. That’s it. According to your own theory, that is a 100% proof that you are wrong.

It’s superstitious because it’s obviously illogical and excessively credulous.

It’s creationist because, like the fundamentalist Christians, you believe that this process explains and prescribes the production of benefits for society. When asked to prove it in a prior thread, your argument boiled down to only, It is because it is, and It must be so because it must be so.

You simply refuse to even consider the possibility that the State does not have the power, that you assume it has in your premise and conclusion.

It is not an ad hominem argument for me to say you are proselytising a creationist superstition. It is mere description of what you are doing, based on the reasons and evidence – your own garbled double-talk – that I have just cited.

Jardine,

Sorry, I wrote something other than what I meant to sa., and as a result I did not make much sense. I meant to say that INFLATION rates are the primary criterion.

I told you what I thought the interest rate should be and under what circumstances the policy should be relaxed or changed. Now, keeping in mind that I think fiscal and monetary policy should react to events (some of which will be unexpected) and that I'm not one of the people in treasury and the RBA who are paid to determine what our nation's response will be, what more objective criteria do you think I should specify?

I'll respond to your other points when I get home.

Quote
Each area of government spending should be pared back, with welfare properly targeted to the poor and duplication between the Commonwealth and States in areas like health and education eliminated.
End quote

Funny how ideological hatred drives policy.

When I went out to work in the late 60's when I was 16 years old the corporate tax rate in Australia was 60%.

Today the corporate tax rate is 30% and falling.

In the 1970s I read a Time Magazine article on how countries invite foreign corporations into their countries because of the tax they pay.

In the 1960'70' a retired worker could live comfortably if they budgeted in a commonsense way.

Today the fast majority of multinational corporations operating in Australia pay little or no tax at all.

In the 1970s the health care system was nearly all public.
Today half the heath care system has been privatized.

In the 1970s the only private schools were for the kids of the elite.
Today most of the education system has been privatized.

Most of the national debt could be wiped out just by extending the GST to the purchase or the sale of shares. Shares are not taxed because that would mean the corporates and the rich would have to pay tax would'nt it.

Today were are inundated with messages that if it wasn't for the welfare system for nobodies there would be no national debt.

Instead of hating individuals who claim the dole why not show just as much outrage about corporate tax? Or, is the reason people dont get angry about corporate welfare is because there man on the TV hasn't told you about it and therefore you dont know about it

' Both you and Foyle are displaying a creationist superstitious belief that is merely circular.'

Actually Jardine he is arguing like a bigoted evolutionist who can not possibly back their faith with reason. You really are a bit mixed up.

Aidan

Inflation rates, of themselves, are not a criterion. They can vary from 0% to thousands of percent.

What we need is something that will tell us whether the particular intervention is justified or not.

You seem to be having trouble understanding the very idea of providing a reason, that does not consider of begging the question, or appeal to the authority of someone else which is just begging the question at one more remove.

Runner
I suggest you read Origin of Species, and The Selfish Gene.

*After* you have understood the arguments and can correctly represent them, feel free to start a thread telling us how you say you disprove them. Note: the book of Genesis is not a disproof.

' the book of Genesis is not a disproof'

Oh I see Jardine observing creation requiring a Creator, design demanding a Designer, laws requiring a Lawmaker I would of thought is far more rational than the idiotic big bang theory and the evolutionist ever changing fairy tales. Instead of requiring me to prove a rational faith you should really be able to explain your totally irrational faith. No doubt you will continue to be vague quoting such a fairytale as the origin of species. Really a document that any true scientist should be totally embarrassed by.

Jardine,

Inflation rates certainly are a criterion, just as (to use your previous example) price is a criterion when buying a car. Now be honest here: everything has a temperature, so do you think temperature can't be an objective criterion when deciding what to wear?

Not all criteria are boolean. Even making boolean criteria by setting cutoff values can be inappropriate when balancing competing objectives. But I did mention that the RBA's cutoff values of 2 and 3 percent was usually adequate, and what the exceptions were. If you want me to derive those rates from theoretical principles, forget it; I can't and AFAIK nor can anyone else. I deem them appropriate based on the observation that the inflation targetting policy has been a success, keeping inflation low and Australia's economy growing for the last quarter century. But if you think we should ditch it in favour of a different objective, I'm willing to discuss it.

What power is it that you think there's a possibility, which I refuse to consider, of the government not having?

Regarding the economic calculation problem, are you saying it ISN'T the problem of how to allocate resources to production? If so, what would you say it is? I don't want to waste time on speculation at cross purposes.

Aidan

"If you want me to derive those rates from theoretical principles, forget it; I can't and AFAIK nor can anyone else."

Thank you for conceding what is in issue between us in this thread, and admitting that there is no justification for government intervention in the supply of money or credit, apart from mere arbitrary opinion which varies from person to person, and from time to time, and which therefore has no more basis in economics than any true or untrue statement about anything.

Temperature, inflation or interest rates, *of themselves*, do not provide a criterion of action. The existence of temperature *itself* does not tell you whether you should take your jacket off. It is when temperature reaches a certain value or range, that you decide to take it off. However this example concerns only one individual subjective value.

The same does not apply to the gumment’s manipulation of the supply of money or credit, both the benefits and costs of which are dispersed throughout, and knowable only through, the subjective evaluations of zillions of people.

Citing the State’s inflation target only begs the question whether and how they know whether the State intervention in question is too much, too little, or just right. You have provided no objective way of demonstrating the competence of the intervention vis-à-vis the relevant values of the populace, and admit you don’t know, thus proving my point.

“Regarding the economic calculation problem, are you saying it ISN'T the problem of how to allocate resources to production?”

Yes, not exactly. The problem of how to allocate resources to production also inheres in a barter economy, and also where man acts in isolation. But the economic calculation problem concerns the use of money to calculate how best to allocate resources to production in terms of prices.

Therefore you have not been able to correctly represent the economic calculation problem, and therefore we are entitled to the conclusion that you do not understand it and are therefore not qualified to make your argument about monetary policy.

Jardine,

I dd not concede what's in issue between us. The fact that you thought I did highlights a serious defect in your reasoning, which I think you need to address before you continue, otherwise it makes you look incredibly stupid.

Just because we don't have a definitive formula for calculating the optimal value doesn't mean we can't say with certainty that a certain value ISN'T optimal. For instance, we don't need to know what the optimal tax rate is to know that the rates of zero and 100% are not optimal. Similarly with the money supply, we can tell from its effects that the do nothing option is inferior. It's worth noting that "do nothing" could be interpreted in more than one way: it could involve keeping interest rates constant (which would lead to much bigger booms and busts); or refusing to lend money at all (which would result in almost permanent depression). Both options are much worse than the status quo.

You criticise me for your own failure to comprehend exactly what "criterion" means! It's the standard by which things are judged, not necessarily the value they have to meet.

Worse still, because of some minor discrepancy between our understandings of what the economic calculation problem applies to, you unilaterally conclude me to not understand it, and therefore make the huge non sequiter of declaring me to be not qualified to make my argument about monetary policy – even though my argument neither relies on nor contradicts the economic calculation problem's implications!

Well, two can play at that game! When you have understood, and can correctly represent, sectoral balances, you will be intellectual qualified to express an opinion on this topic, and not before. Until then, you simply don't understand what you're talking about. For sectoral balances are far more relevant to fiscal policy than the economic calculation problem has ever been or will ever be.

Aidan

You have said "Right now the economy needs stimulus so the government should be borrowing more." Okay? Fair enough?

Then you have said "If you want me to derive those rates [i.e. the rates proving that governmental intervention is justified] from theoretical principles, forget it; I can't and AFAIK nor can anyone else."

So you're contradicting yourself, and you *have* conceded what is in issue.

By saying:
"For instance, we don't need to know what the optimal tax rate is to know that the rates of zero and 100% are not optimal."
you're begging the question *again*.

You need to demonstrate that the advantages of a given intervention outweigh the disadvantages, which is what's in issue, and which you've just admitted you can't do. Generalising the problem from particular interventions, to all of them, doesn't help you.

You then try to solve that problem by reversing the onus of proof onto me: basic logical error on your part. I would only have to demonstrate an understanding of sectoral balances if you had first been able to demonstrate that you have the knowledge necessary to justify government interventions aimed at sectoral balances. By agreement between us, you don’t know, even in theory, whether the advantages of a particular government intervention outweigh its disadvantages.

You have wrongly assumed that the difference between a barter economy and a money economy is not "minor", and that that the economic calculation problem is only significant where "central planning completely replaces markets".

This is not correct. The significance of the economic calculation problem is that it explains why you say "I can't and AFAIK nor can anyone else."

You are left with merely assuming that government intervention MUST be justified, even though you yourself admit that it isn't in all cases, so not even you agree with your basal assumption.

The only difference between your methodology and runner's, is that he imputes intelligent design by a value-creating superbeing to biological order, and you do it to economic order. The intellectual process is the same.

(cont.)

I'm not going to explain to you the economic calculation problem any more than I'm going to explain the theory of evolution to runner. You need to develop critical and independent thinking.

In any event we are both agreed that you have no objective way of knowing, and cannot prove, that more stimulus and government borrowing are appropriate now.

Merely saying "inflation rates" only begs the question *which* inflation rates. Merely citing authorities, and assuming they must know somehow, only proves what I am claiming: that you have failed to understand the economic issues.

Think of it this way: not even you are claiming that stimulus and borrowing are appropriate all the time. Even you acknowledge that central planning can be wrong. Well?

Let's cut to the chase. How do you know whether the government intervention you advocate would be beneficial in terms of the subjective evaluations of all the different people affected positively and negatively, and how do you figure that out? (A simple “I don’t know” will suffice.)

Jardine,

I base my conclusion that the economy needs stimulus on the facts that:
• a lot of people are out of work.
• with inflation rates very low (whether compared to the RBA's target rate or past rates) there is no sensible reason not to stimulate the economy.
• fears of a house price bubble have deterred the RBA board from cutting interest rates as much as they otherwise would have.

So while I am incapable of giving you a definitive, theoretically derived, optimal amount of stimulus this country's economy needs, I can be very confident that it's more than we're getting at the moment.

So I have not contradicted myself, and not conceded what's in issue.

Regarding my example of optimal tax rates, I thought you accepted the concept of the Laffer Curve. If you don't, I'm certainly willing to discuss it. But if you do accept it, I'm not going to waste time explaining to you what you already know. This is a debate, not an exam!

My generalisation of the problem was merely an attempt to get you to comprehend the absurdity of your own generalisation of the problem (where you won't accept that any intervention is needed without a theoretically derived formula for the optimal amount of intervention needed).

You are extremely arrogant, you think your understanding is perfect when it's actually grossly deficient, and you wrongly assume me to be the ignorant ideologue you are, as demonstrated by your frequent preposterous claims about what my position is. You need to develop critical and independent thinking, as I have done.

But despite your arrogance and poor thinking skills, I don't believe that you're such an imbecile that if you understood sectoral balances you'd continue to believe the Commonwealth Government should try to run budget surpluses when the private sector's still weak. Nor that it should run budget surpluses each year until it regains a neutral balance sheet.

And your "don't know even in theory" comment is revealing. If the theory doesn't match the facts, what you "know in theory" you actually don't know at all...

Jardine,
Further to my previous post:

You have wrongly accused me of assuming that the difference between a barter economy and a money economy is not "minor". I made no such assumption, and nor did I make the opposite assumption (which I suspect you meant to accuse me of). My understanding is that the economic calculation problem DOES extend to barter economies, where it is still solved by the market, albeit in a far less efficient way than if money were used. But since barter economies are very rare nowadays, so I can accurately describe that discrepancy between our understandings of it as minor.

However I now see there are some major discrepancies as well, and a quick Google search fro "economic calculation problem" appears to indicate that your understanding of it is the one that's out of step with the rest of the world. The ECP is indeed "only significant where central planning completely replaces markets" because otherwise it is solved by markets. But you seem to be extrapolating it far beyond its original purpose. You seem to assume it shows ANY government intervention to produce an inferior result. And you seem to think it extends to things other than the means of production. You're wrong on both counts. Which leaves you (by your own standards) not qualified to express an opinion on the topic!

The ECP is not the reason why I say "I can't and AFAIK nor can anyone else." The complexity of the problem is. Admittedly the complexity of the problem was also the reason for the ECP, but it doesn't mean the answer's the same.

I am not left merely assuming that government intervention MUST be justified. I am left concluding that there are circumstances where government action is advantageous (and therefore justified). Sometimes it's clear that fiscal and/or monetary policy should be tightened, and sometimes it's clear that it should be loosened. The fact that there are times when it's not clear what (if anything) should be done is merely an acknowledgement of the complexity of the problem.

(TBC)

All I have to do to prove, to your own standard, that you are, to quote you, "100% wrong" to advocate stimulus, is say I prove so by saying "inflation rates".

That, according to you, is an entire and self-sufficient argument.

Then when that absurd piece of flummery is rejected and challenged for specifics, all I need to do to prove you 100% wrong, is assert a few arbitrary opinions about "a lot" of this, "very low" of that, and "fears" of the other.

So either you accept this method of proof against you, since you yourself have used it against me, and therefore you must accept that I have just proved you 100% wrong; or you don't accept it in which case it is not good for you either, and you've proved nothing.

All you're doing is begging the question again, you fool.

At no stage have you established whether, and how you know, that the advantages of further governmental inflating, borrowing and spending would outweigh the disadvantages, so you've got nothing

"If the theory doesn't match the facts, what you "know in theory" you actually don't know at all..."

That assumes you know all the factual variables, you fool.

You're guessing, and simply assuming that everyone else shares the same mental method as you.

Your entire method is nothing but merely asserting the arbitary political opinion, based on nothing but your *wish* for cost-free benefits, that central planning works economic wonders, denying that's what you're asserting when confronted with it, and then denying that you're contradicting yourself.

"You have wrongly accused me of assuming that the difference between a barter economy and a money economy is not "minor"."

Sorry, my mistake, I meant to say that you have wrongly assumed that the difference between a barter economy and a money economy is minor. However like you I am not really concerned about barter issues.

If you will actually *think* about it for once, you will see that the economic calculation problem cannot only apply where central planning completely replaces markets, because if it did, that would mean that the existence of, for example, one privately owned farm in the whole of Soviet Russia, would negate the economic calculation problem.

"The ECP is indeed "only significant where central planning completely replaces markets" because otherwise it is solved by markets."

Yes, solved by *markets*, not solved nor solvable by central planning, which by its very existence, displaces markets.

So it is common ground that
a) central planning completely replacing markets would be a disaster, and
b) some partial central planning will definitely be worse than no government intervention at all.

Your challenge is to show, by some *rational* standard, how you know that any given category of government intervention will necessarily *not* fall into category b) above.

All you've done so far is assert perfectly arbitrary opinions - "adequate" this, "a lot" that, "a bit" of the other, "sensible reason" something else. These facile expressions only beg the question.

I say that the reason you're not proving by any objective standard, is because you can't do it, because of the economic calculation problem.

On the other hand, you're
1. admitting that you can't do it,
2. denying that you can't do it,
3. denying that it's because of the ECP, but then
4. giving no coherent theoretical reason why you either can do it or can't do it.

If you can do it, then let's see your calculations! Show your account of values for all those who would have decided otherwise, absent the intervention.

And if you can't, then admit you've got the ECP problem!

Jardine K. Jardine, if you have ever debated a fundamentalist Christian on their claims about God, you will notice that your intellectual method is exactly the same as theirs. You simply assume before the discussion's outset, without any explanation or definition or proof, the existence of an all-knowing well-intentioned moral and pragmatic super-being called The Invisible Hand of the Market aka your God.

Then when challenged to prove your mythical beliefs, you simply retort the same circular basal assumption in your own favour. Endlessly. Thus you hold your circular beliefs as complete proof and immunity against any critical inquiry.

Economics is a Religion not a Science. You appear to be one of her High Priests, or a Cardinal. Given your pseudonym of Jardine K. Jardine, it's speaks a plenty of where your head's at, ay me Lord?

Now if you can’t see, or don’t care, that that’s illogical, that’s your problem. All I have to do is say 'Invisible Hand' to prove, according to your own standard, that you are “100% Hypocritical”. It’s superstitious because it’s obviously illogical and excessively credulous.

It’s creationist because, like the fundamentalist Christians, you believe that this process explains and prescribes the production of benefits for society. Your argument boils down to only, It is because it is, and It must be so because it must be so.

You simply refuse to even consider the possibility that Adam Smith has been hijacked and taken hostage. That overplayed Hand of the Market does not have the power that you assume it does.

It is not an ad hominem argument for me to say you are proselytizing a creationist superstition. It is mere description of what you are doing, based on the reasons and evidence – your own garbled double-talk. You're a sophist, a spin-meister, believer in magic and follower of a wholly discredited fake religious experience.

The State holds whatever Power the Government decides to give it. The Government is The People in whom the only true earthly Power resides.

Not has been drug dealers like the Jardines. Your religiously held myths are irrelevant.
-

TO'R

The economic goods produced by the market are not getting to you by religious myth.

On the other hand, if you wish to assert that the State is equally or better capable at economising anything - in terms of the ultimate human welfare criterion however you care to define it - you run into the economic calculation problem.

Either you must assert that full socialism is equally or more physically productive than capitalism, and better able to allocate scarce resources to human felt wants - in which case you must assert that mass starvation under totalitarianism better satisfies the human wants satisfied by capitalism.

Or you must resile from your major premise - assumption of governmental omniscience, omnipotence and benevolence - and you are then in the unanswered and unanswerable problem facing Aidan: by what objective standard do you know which economic interventions of government are detrimental, and which are beneficial? Your mere arbitrary opinion is not an objective criterion, not because I disagree with it, but because you have to account for the subjective human values and the alternative possible uses of resources that you have forcibly sacrificed to get the result you wanted at others' expense.

Go ahead: try. Prove how you know what is the right amount of stimulus and spending. Make sure you show in your workings how you calculated the subjective values of all those people affected positively and negatively, as against the counter-factual scenario, and how you know it.

The same problem does not confront the supply of goods and services by voluntary exchanges based on private property. No assumption of a supernatural superbeing is required to assume that people will exchange what they expect will make them better off, nor that voluntary exchange based on private property makes possible economic calculation.

By contrast, your firm belief in the super-economising super-ability of the State has no basis in reality or reason, which is why Aidan and you can’t defend your beliefs without instant resort to question-begging, non sequitur, misrepresentation, appeal to authority, ad hominem, and every species of fallacy.

(cont.) Furthermore you have simply ASSUMED that everyone else must be following the same jumbled illogical process of self-opinionated arbitrary guesswork as you are engaged in.

But I'm not.

I disprove your beliefs by the contradictions and illogic and errors in your argument, for example, your having conveniently ignored ethics and economic issues of the force and threats that you advocate.

You do not disprove my argument, but only ignore retort blind open-ended state-worship, without even understanding, let alone identifying or justifying the economic assumptions that you are making.

For example:
"The State holds whatever Power the Government decides to give it."

Pure stupid religiosity.

Does the State have the power to suspend the Second Law of Thermodynamic, does it?

Answer the question, fool.

Jardine (continued)
What you stupidly assume to be inconsistent application of some basal assumption that's logically inconsistent with my some of my other beliefs is actually an acknowledgement of the fact that dynamic problems require contextual responses!

"Which inflation rates" is a sensible question. I think the overall inflation rate (the CPI) is the most sensible one to use, but if you prefer some other measure then I'm happy to discuss it.

I could go on, but I think what you've written since then is far more relevant to the flaws in your argument and differences in our ways of thinking:

When I said:
...If the theory doesn't match the facts, what you "know in theory" you actually don't know at all...
You responded with "That assumes you know all the factual variables, you fool."
But you're the fool because I make no such assumptions. Indeed not knowing all the factual variables is a compelling reason NOT to accept your theory as a basis for decision making.

Regarding you claim that...
"If you will actually *think* about it for once, you will see that the economic calculation problem cannot only apply where central planning completely replaces markets, because if it did, that would mean that the existence of, for example, one privately owned farm in the whole of Soviet Russia, would negate the economic calculation problem"
...It's not a question of negating the problem, it's a question of solving it. One private farm in the whole of Soviet Russia would enable the problem to be crudely addressed; more private farms would enable a more comprehensive solution. And of course there's also international commodity prices, which were the actual basis of the USSR's solution to the ECP. Of course they still had many problems with economic calculation, but THE economic calculation problem was solved.

And it's simply untrue that central planning, by its very existence, displaces markets. Unless the central planning creates an such an abundance that everyone's desires are fulfilled (which seems unlikely) the market will not be displaced.

But that's a trivial point compared to your main error... (tbc)

@Jardine K. Jardine, I'm so sorry, I made a big mistake.

Here I was thinking you were probably and overly obsessive economics student lacking sleep, with very extreme ideological beliefs in Anarcho-Capitalism. http://wiki.mises.org/wiki/Anarcho-capitalism

Only to discover that you much more than that my dear friend and are clearly suffering from the after effects of a somewhat strained childhood that has led to profound narcissistic psychopathology.

Where your particular economics political bent is merely the ground upon which you have chosen to express your seriously disordered anti-social personality to harass and abuse everyone else you can find on social media venues.

Wonderful, great, well bully for you Jardine K. Jardine!

Maybe this may help others understand exactly what they are dealing with here.

Who are Pathological Narcissists and Emotional Manipulators?
http://www.youtube.com/watch?v=o7j2axIRja4
(a quick effective 5 minutes)

Pathological Narcissism, Psychosis, and Delusions
http://samvak.tripod.com/narcissistpsychotic.html

Narcissistic Personality Disorder (NPD), Self-love, Narcissism, Narcissists, Psychopaths, And Relationships with Abusers, Stalkers, and Bullies FAQ
http://www.narcissistic-abuse.com/faq1.html

Narcissist: Psychotic? (6mins)
http://www.youtube.com/watch?v=pwgG2A0bHII

Bonus References

http://psychcentral.com/disorders/narcissistic-personality-disorder-symptoms/

http://www.webmd.com/schizophrenia/guide/delusional-disorder

http://www.askdoctork.com/the-word-is-used-frequently-but-what-does-being-delusional-really-mean-201306084949

Exploring the Psychology of Wealth (quick 9 mins video)
http://www.pbs.org/newshour/bb/business-jan-june13-makingsense_06-21/

On Wealth and Wrongdoing: How Social Class Influences Unethical Behavior
http://escholarship.org/uc/item/57x7n454

Global Economic Symposium (GES) 2013 - interview with George Lakoff
http://www.youtube.com/watch?v=EjNwXx2DwcQ

Professor George Lakoff on The Political Mind
http://library.fora.tv/2008/06/20/George_Lakoff_on_The_Political_Mind

Lakoff on Adam Smith, Taxes, Progressive Thought and the Conservative Rewriting of History and Adam Smith's Original Principles
http://www.youtube.com/watch?v=jCXxc_M9EmE&feature=youtu.be&t=1h6m55s

There is no Political Ideology of the Moderate. I am a Moderate. Moderation in all things including Moderation.

Ideology is a collection of Beliefs held by an individual, group or society.

Religion is a collection of Beliefs too. Funny that. :-)
-

Jardine (continued),

The big problem is that you wrongly see all government intervention as "central planning" and assume it to be an attempt to replace the market. You don't seem to realise that despite their self optimising nature, markets are imperfect!

Problems with leaving it all to the market include, but are not limited to:
• Markets ignore externalities (both negative and positive)
• Markets are inherently biased towards the interests of the rich
• Markets are inherently biased to short term decisions
• Markets tend to also be biased towards the bigger participants
• Risk management can be a much bigger problem for smaller participants
• Not all market participants have equal access to information
• Some market participants (often newer ones) can't fully participate due to lack of access to credit.

So there are many situations where government intervention can be justified.

But with the money supply the case for government intervention is much stronger because there is a positive feedback loop. When the money supply is expanding, there are more opportunities to make a profit, so there's more private sector investment, so debt increases, which expands the money supply, so there are more opportunities to make a profit... and eventually constraints on real resources will lead to high inflation.

Conversely when the money supply is contracting, there are fewer opportunities to make a profit, so less private sector investment, so fewer loans, so the money supply shrinks even more... and unemployment keeps rising.

The effect is exacerbated by individuals being more confident to spend in the boom times, but saving more because of concerns about their own future in the busts.

The sensible response is for the government to actively run a negative feedback system. There are two ways to do this: firstly the government can literally do the opposite of the private sector, and run surpluses in the booms and higher deficits in the busts. Secondly they can adjust interest rates to change private sector behaviour - although this loses its effectiveness when interest rates are already very low.

(tbc)

Jardine (continued),

The worst thing for the government to do is attempt a procyclical response like immediately trying to balance the budget.

There are many variables; far too many for anyone to write an algorithm to give you a definitive answer on what to do in any given situation, let alone for me to explain to you in 350 words. So the solution is to look at events, work out what's going on, and react accordingly. Sometimes there will be strong evidence that expansionary policy is needed; other times more contractionary policy will be better. There will be some occasions where the case for a particular action is not so strong. And yes, there will also be occasions where it's a value judgement. Life's like that.

TOR

Ho hum ad hom.

Unfortunately the question whether government should increase its borrowing is not answered by Thomas O'Reilly's faux psychologising based on links to Wikipedia about narcissistic personality disorder.

Got those calculations there yet feller?

Aidan
Ultimately, underlying all the economic issues are deeper issues of epistemology: how we know whether economic propositions are true or not.

There are many genuine challenges and real issues about this, but I say that the very least requirement is that the propositions must comply with the principles of logic, otherwise we've got nothing. That’s why I keep going on about it.

Now given it's common ground you don't know all the factual variables, how do you know what is "evidence" for your theory, and what is not?

For example, suppose an economist says:
"1. The government increases the supply of $5 bills by doubling it, and the money supply increases by as much;
2. After that, the supply of apples goes down by 5 percent;
3. THEREFORE the decrease in the supply of apples is BECAUSE OF the increase in the money supply."

Can you see any problem with that line of reasoning?

How is that any different from you saying what the “evidence” for increases in stimulus spending is?

The government spends more or less, and unemployment goes up or down, say. How do you know whether it's because of, or despite the governmental action in question?

I have never said the market is perfect, and have no need of that hypothesis.

But whatever the defects of the market, the State will not be in any better position unless you can demonstrate what you have so far failed to demonstrate, or even understand.

It's not enough to just assert a mere value of a parameter of your own choosing - (this is essentially what Mao did by deciding that the one measure of economic progress was steel production) - for example, an inflation rate of such and such.

It's not because I don't agree with doing it, although I don't.

(cont.)
It's because the very nature of economics is that we have to reconcile what is gained with what is sacrificed. You're not doing that, and when I ask you to prove that you’re doing it, you don’t answer the question.

So you're not comparing apples with apples, because private capitalists must confront gains with costs. But your technique is only to assert and assume that, at your asserted point, any downsides of State action were automatically justified.

But if that's not your technique, then you still haven't explained how you distinguish justified from unjustified interventions, in a way that takes account of the downsides equally impartially on the both sides of the question.

I say "inflation rates" proves you wrong, and according to you, we are both now agreed, by your own standard of proof, that you are wrong.

If the ECP can only be solved by reference to other market data that have not yet been extinguished by socialism, then you are conceding that central planning and governmental action displace market data to the extent of the governmental intervention. For example if the USSR nationalises commodity production, but commodity prices are still available because of the existence of commodity markets elsewhere, then you're admitting that the only thing stopping governmental action from causing complete economic and social chaos, is the existence of private property and markets aka capitalism.

I'm not even asking you to agree. But so far, you don't even seem to understand. You think it's all solved by you simply asserting that you know, and then when challenged to provide evidence or reason, you admit you can't!

Jardine,

I'm glad you now recognise that markets aren't perfect and that you're willing to consider the question of whether economic propositions are true or not.

I strongly agree that the propositions must comply with the principles of logic. There's a need to avoid false assumptions as well as avoiding non sequiters. And reality checks are always needed.

Which brings us to your question:
"The government spends more or less, and unemployment goes up or down, say. How do you know whether it's because of, or despite the governmental action in question?"
The answer is partly basic psychology (understanding the circumstances of people's willingness to work and employers' willingness to employ them) and partly the effects of sectoral balances. But the basis is simple enough: when the government employs people directly, obviously that decreases unemployment. If the government contracts something out to the private sector, it still results in people employed to get the job done. Even if the client isn't the government, it results in people employed to get the job done. There's a pretty clear relationship between spending and employment. The cost is likely to be a partial rise in the inflation rate (but only a very small one unless real resource constraints are reached) and a short term partial reduction in currency value (again only very small, and no I don't have a formula to calculate the exact size. Partial in this context means other factors could reverse the result).

Unemployment is itself a huge waste of resources; usually by far the biggest waste in the economy. I find it obvious that the benefits of getting more people into productive work could easily dwarf the cost; if you don't, I'd appreciate a brief explanation of why so my explanation won't have to be too long.

For other economic interventions, some sort of benefit cost analysis or IRR based measure would be appropriate. But when you make those calculations, you WILL encounter the problem of how to quantify the value of externalities. Dismissing anything subjective as worthless is not an acceptable solution, as it is itself subjective.

@Jardine: "TOR Ho hum ad hom."

Ad hominem abuse ridicule from Jardine K. Jardine includes: "BWAHAHAHAHAHAHAHAHAHAHAH!" and "your infantile belief system" and "you squirming fool" and of course: "According to you, we're all going to boil to death if you don't HURRY!"

Nope, I never said that last item. So why are you lying Jardine? Did you believe you'd get away with lying?

re: "based on links to Wikipedia about narcissistic personality disorder."

There was no 'wikipedia links.' So again I ask, Why are you lying? Can you see any problem with that line of reasoning (or lack of) Jardine?

re: "because the very nature of economics is"

Mmmm, another lie or merely confused. No "nature" exists in conceptual frameworks that are purely theoretical and hypothetical and not real in nature.

Nature has nature, frogs have a nature, humans have a nature, fish, seaweed and grass have a nature. There is no "nature" in non-things that do not exist (except inside your head.) But there is a "nature" to what goes on inside your headspace because you are human (I assume).

There is NO 'nature of economics'. Why are you making things up Jardine instead of telling the truth?

For Educational purposes:

(NPD) : How to Recognize a Narcissist
http://www.halcyon.com/jmashmun/npd/index.html

Narcissistic personality disorder is a mental disorder in which people have an inflated sense of their own importance, a deep need for admiration and a lack of empathy for others. But behind this mask of ultraconfidence lies a fragile self-esteem that's vulnerable to the slightest criticism.
http://www.mayoclinic.org/diseases-conditions/narcissistic-personality-disorder/basics/definition/con-20025568

Unmasking Narcissists - Sam Vaknin
http://www.youtube.com/watch?v=sU305NqXT94

Here are DSM’s requirements for “earning” the unenviable diagnosis of NPD:
4. Requires excessive admiration [regularly fishes for compliments, and is highly susceptible to flattery].
7. Lacks empathy: is unwilling [or, I would add, unable] to recognize or identify with the feelings and needs of others.
9. Shows arrogant, haughty [rude and abusive] behaviors or attitudes.
http://www.psychologytoday.com/blog/evolution-the-self/201311/6-signs-narcissism-you-may-not-know-about
-

Aidan

“But the basis is simple enough: when the government employs people directly, obviously that decreases unemployment.”

A number of objections:

1.
You haven’t answered my question above. Can you see any problem with that line of reasoning (increase of $5 bills, decrease of apple supply)? Or not? Answer please?

2.
It is only obvious that employment increases by the extra number that government directly employs, all other things being equal.

It is not obvious that the *net effect* on employment would an increase. What about the reduction in employment caused by the government’s withdrawal of the capital from its alternative market uses?

3.
And in reality, all other things aren’t equal.

We cannot validly conclude that an overall increase in the employment level is because of, or despite, the government intervention, rather than, say, the price of meat or iron in China.

4.
Furthermore, that is to count only the possible effects of the intervention *on employment*. You haven’t accounted for the negative effects as a matter of want-satisfaction in general, or utility, or social benefit, or whatever you want to call or define the ultimate human welfare criterion.

5.
Therefore you have not established your “evidence”.

6.
Furthermore, the evidence doesn’t interpret itself, because it is common ground that you don’t know all the factual variables. You can’t just assume that monetary policy does or may have net beneficial effects, because that’s precisely what’s in issue; and you agree you must be logical.

7.
It is true that any opinion on this matter will always involve value judgments, which is unavoidable, as is the fact that people, in forming an opinion, will always have to rely on an unknowably huge data set full of contingencies and variables.

But you’re not the only one with value judgments! Everyone’s got ‘em! Result: you admit your standard relies on arbitrary and imperfect opinion, including error and prejudice like everyone else!

8.
The existence of imperfection in human affairs does not self-evidently justify the proposition that government is perfect, or better. That’s what’s in issue! You need to *prove* it by ....

(cont).
the same standard you apply to markets, not just assume that government is perfect or better.

This fact completely demolishes your justification of governmental action, namely: “So [i.e. because of market imperfections therefore] there are many situations where government intervention can be justified.”

You yourself admit that you can’t supply proof, even in theory. In practice no-one knows or can know the data set. All you’ve got for “evidence” is post hoc ergo propter hoc, and you avow logic.

Therefore we agree that neither reason nor evidence support you.

9.
Therefore we have also established by agreement everything I have contended against you in this thread, namely:

9.1
You have no objective standard, by which to maintain there should be more government stimulus and borrowing, let alone that I am “100% wrong”.

Cutting out all the circumlocution, the argument looks like this:
I: “You don’t know, do you, and have no objective way of establishing, that government should do more stimulus and borrowing?”
You: “No.”

9.2
It is common ground that the relevant data set is too huge, too complex, too variable, too contingent, and too unknown to be known by anyone, including government.

Therefore you have attributed to government the capacity to do what it is physically impossible to do.

This is in the exact same logical category as other physical impossibilities, therefore you have attributed supernatural powers to government.

9.3
Furthermore, government intervention
a) is central planning, and
b) imports the ECP
*to the extent of the intervention*.

For example, suppose government imposes a minimum price on something, such as the minimum wage. And suppose everyone complies.

Then it follows that
a) the minimum price of labour is centrally planned, and
b) the market data for what would have been the price of labour, absent the intervention, will not be available; and the ECP will apply to that extent.

But if not, why not?

TO'R
Can government suspend the laws of physics?

Answer, fool.

Jardine K. Jardine says: "TO'R Can government suspend the laws of physics? Answer, fool."

No I will not. Jardine, YOU need to learn how to READ what I said correctly, and STOP creating mythical Strawman arguments out of your own stupidity or dyslexia!

You also need to learn how to READ what other people write as well.

You are incompetent!

"The Dunning-Kruger effect is the finding that the poorest performers are the least aware of their own incompetence.

Philosopher Bertrand Russell said: “One of the painful things about our time is that those who feel certainty are stupid, and those with any imagination and understanding are filled with doubt and indecision.”

(Modern 21st century) Psychological research has now shown he was right. The reason for the Dunning-Kruger effect seems to be that poor performers fail to learn from their mistakes. The proposed solution is that the incompetent should be directly told they are incompetent.
http://www.spring.org.uk/2012/06/the-dunning-kruger-effect-why-the-incompetent-dont-know-theyre-incompetent.php

Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments.
Kruger, Justin; Dunning, David - Journal of Personality and Social Psychology, Vol 77(6), Dec 1999
http://psycnet.apa.org/psycinfo/1999-15054-002

Buy it, Read it!

When peers are not peers and don't know it: The Dunning-Kruger effect and self-fulfilling prophecy in peer-review
Author Sui Huang, First published: 6 February 2013
http://onlinelibrary.wiley.com/doi/10.1002/bies.201200182/full

It's FREE, Read it!

And READ WATCH the content in the other links I provided - oh don't.

Frankly, I do not bloody care if you do or don't, nor what you think or say.

I make a final comment to you Jardine in another thread - go find it!
-

Jardine,

1. Of course that "one of reasoning" is an obvious non sequiter. I pointed out in my response that there's a need to avoid false assumptions as well as avoiding non sequiters. The 350 word limit prevented me from emphasising it more.

2. The governments withdrawal of the capital from its alternative market uses is NOT part of the spending process. Stimulus spending isn't diverted spending, it's new spending and that generally means deficit spending.

3. We can always tell what effect the government intervention is having, even though other factors may prevent us from precisely determining its magnitude.

4. Lack of employment has the biggest negative effect of all. Pollution is the only significant negative effect that's worse when more work is available, and that's something that people are more willing to address when the economy's going well.

5. You'll need to reconsider that in light of the above.

6. Government intervention doesn't have to be directed at the variables themselves. Instead it can address their effects, so unknown variables can be compensated for.
(This also invalidates your point 9.2)

And I wasn't just assuming monetary policy does or may have net beneficial effects, I was explaining to you why it can.

7. You're the one who objects to value judgements other than your own. I accept that politics and economics are closely intertwined. What I object to is basing economic decisions on false assumptions.

8. I'm certainly not saying the government is perfect. What I'm saying is that governments are best placed to deal with the problems stemming from the markets' imperfections.

9. What you have claimed, often when failing to seriously consider my argument, is NOT what we have established.

9.1 We have objective ways of measuring even though the threshold for intervention is subjective.

9.2 (Invalidated by my response to point 6)

9.3 Intervention in a market doesn't replace the market, nor prevent it from functioning. The ECP (in its original form and as generally understood) is irrelevant.

Out of words for now; the case for labour market regulation will take far longer to explain.

Aidan

1.
Unclear. Do you mean you agree that that line of reasoning is illogical?

2.
What about the reduction in employment (or utility) caused by the government’s withdrawal of the capital from its alternative market uses?

How have you accounted for it?

3.
“3. We can always tell what effect the government intervention is having”

3.1
Contradiction. See 1 above. You’ve admitted this methodology is illogical.

Given you don’t know all the factual data, your reasoning as to the evidence is only 'post hoc ergo propter hoc'.

Prove how you know.

3.2
“even though other factors may prevent us from precisely determining its magnitude.”

The issue is what the *magnitude* of stimulus and borrowing should be.

So if you don’t know the magnitude of the effect of governmental action, how do you know what the magnitude of the stimulus should be?

4.
“4. Lack of employment has the biggest negative effect of all.”

What about death?

Prove how you have
a) known about, and
b) taken into account
any unnecessary tendency to deaths - anywhere in the world – caused by your interventions - eg by withdrawing resources from making medicines or ambulances, or by reducing food production - the capital for which was confiscated by government to spend on the interventions you advocate.

Show your calculations.

5.
Therefore you have not established your “evidence”.

It’s not a precondition of the discussion that everyone must uncritically swallow down all your bald assumptions in favour of the State.

All you’ve done is assume – over and over – that the State knows, what you have already admitted it doesn’t and cannot know. Contradiction.

But if it does know, then prove it! Even in theory! Your bald assertions aren’t proof. Show how you took into account the relevant subjective values of all the affected people!

6.
“Government intervention doesn't have to be directed at the variables themselves.”
True, and irrelevant.

“Instead it can address their effects, so unknown variables can be compensated for.”
True.

The question is whether it can compensate for them *more economically and ethically* i.e. in terms …

… of the relevant competing human values; which you haven’t a) identified, or b) proved.

All you’re doing is pointing to benefits, and claiming this justifies governmental action.

You’re not taking account of the downsides; and this invalidates your process of economic reasoning.

7.
It’s not me dismissing subjective values and value judgments, it’s you.

That’s why I keep asking you how you
a) know,
b) calculate, and
c) justify
interventions in terms of the subjective values of all the millions of people whose values and welfare will be overridden by them. And you keep not explaining how you accounted for them.

I’m *in favour of* people being free to choose on the basis of their subjective evaluations (subject to a general ban on aggression and fraud), and you’re *against*. That’s what the argument is about, remember?

I’m only rejecting *your* value judgments as superior at representing others’.

8.
“governments are best placed to deal with the problems stemming from the markets' imperfections.”

Prove it.

Government has all the same defects as those you cite, and numerous more serious defects as well, not least, a coercive monopoly on force and threats; legalising for itself what it criminalises for everyone else; aggressive war; privileges and immunities; a licence to print money; and the economic and social chaos of the ECP.

You have not established that government is best placed to do anything economic. You have merely asserted the ECP doesn’t apply where government coercively overrides market processes; never explaining how government overcomes the ECP it causes, but by *market* data.

9.1
An objective standard by which 7 billion people are equally entitled to different opinions is not an objective standard, it’s arbitrary.

9.2
Contradiction.

Either you admit, or you deny, that you have the theoretical means to solve the ECP.

Which is it?

9.3
Prove it.

______

These are not matters of mere opinion or ideology. I am disproving your claims by your admissions, self-contradictions, non sequiturs, and circularity. I am inviting and imploring you to falsify my claims, even showing you how to do it, and you’re not doing it.

Jardine,

1. Of course. Though it is so illogical that I'd dispute it even qualifies as a line of reasoning.

2. You're either wilfully misunderstanding me or have failed to comprehend my last answer:
The government’s withdrawal of the capital from its alternative market uses is NOT part of the spending process. IF the government withdraws capital from its alternative market uses then that should be accounted for separately. But the government can spend money whether or not it withdraws it from its other market uses.

When you understand that, please go back and read the rest of what I wrote about this: you'll find it makes much more sense.

3. One example: we know that if the government employs more people AND DOES NOT WITHDRAW CAPITAL FROM OTHER USES then the government's actions are having the effect of reducing unemployment even if the nation's total unemployment goes up because of the private sector's actions having the opposite effect.

4. The number of deaths from it would be zero, as the capital confiscated by government to spend on the interventions you advocate is zero.

____________

I could go on, but until you understand that a fiscal stimulus involves increasing the money supply rather than just redirecting the money, there's not much point – you'd continue to mistake the effects of your own misunderstanding for logical errors on my part.

It might help if you realise that the time there's the greatest need for the government to provide fiscal stimulus is when private sector actions are decreasing the money supply.