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    Greg and Beth

    the political and personal musings of two
    mountaineers living in west-central Florida
     
    The Problem With Not Understanding Economics Comment
    Gregory Morris, 11/19/07 10:54:22 am
    This tax loving liberal "explains" how taxes are a really good deal.

    Sure, there is a definite truth to the concept of "economy of scale". More buying power (ala Walmart) means lower prices. Makes sense. So what Lemberger is saying is that all we have to do is give the government our money, and they'll get us a better deal on education, health care, etc.

    You can take this argument to an extreme and say "let's just give all of our money to the government, and let them provide for us." He explicitly says that this isn't a good idea, but only so he doesn't "sound like a communist." The truth is, to a "modern progressive", there is no line you can draw saying "the government should do no more than this." The reason I can't find a "happy medium" with someone like this is because there is no end to how much they would be willing to tax and socialize (the concept is kinda like the slippery slope of gun control, if you hadn't already noticed.)

    Now, for the economics... keeping in mind that I hated econ in college, and I never would have taken it if it hadn't been required. I do, however have a smidgen of common sense, which is all it takes really. First, the government does not have value like a productive company has value. Our economy doesn't grow because of the government or taxes. Second the author is comparing what a police officer offers you to what a private security guard offers you... which is apples and oranges. If you want to "do the math", you can't add A + B and get 2A. His other comparisons are just as silly. But what is more important is that the author of this op-ed fails to understand that the private sector is even more capable of taking advantage of scale and specialization. We get "good deals" all the time, without even realizing it.

    You can follow the specialization concept back to a self-sustaining farm, where nothing is imported, all tools are created on-site, and a diverse set of knowledge is required to handle every possible need. Everything is expensive on a farm like this, therefore all of their products are also expensive, therefore consumers don't consume as much... you get the idea. On the opposite end of the spectrum is the modern farm, where the sole focus is farming. They don't build their own plows, they buy them from companies who focus solely on making plows, thus allowing them to be less expensive. The plow company doesn't build plows one-at-a-time like the "self-sustaining" farm, so they can do it a LOT cheaper. In the end, the modern farm gets the plow cheaper, so they can sell their grain for less, so the consumer gets cheaper bread, and didn't have to grow his own grain. The math works out a lot more favorably when you have private industry which is profit-motivated, and market-driven, as opposed to a government who is bureaucratically-(de)motivated and politics-driven. The combination of specialization in the free market, and the economy of scale which is relied upon by modern business simply can't translate well into a massive central government.

    [Comments are closed after a month.]

    Re: The Problem With Not Understanding Economics
    Justin Buist, 11/19/07 12:02:56 pm
    Ya know, if I was only paying $9k in taxes a year I might think they're a good deal too.
    Re: The Problem With Not Understanding Economics
    name, 11/19/07 6:54:34 pm
    I only pay about $4,500 in (income and socsec) taxes each year and I am pissed! Taxes are almost always retarded. Look at social security. If I stay at my current salary, about $20,000 per year, I will have paid $75,000 to the government in socsec and medicare taxes by the time I retire. They will, through inflationary monetary policy, turn that into about $45,000 in real value. In a market fund at 7% (which tends to be a normal long-term average), I can make $75,000 turn into about $415,000. Good job Social Security Administration! You have taken my taxes and destroyed 90% of the potential value. Only stupid people who pay $9k in taxes think they are getting a good deal.
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