Study: More Than Half a Trillion Dollars Spent on Welfare But Poverty Levels Unaffect

Wrong

But it broke, it could not be spent (potentially or otherwise) elsewhere because IT WAS spent on the broken window.

 

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ok so if you were god and you had a choice before hand of whether to break the window or not.. would you agree that it would not be economicly beneficial to break the window?


Pretty simple question.

 

Wrong

OH come on…is this crap meant to be your rational argument what next fairies, goblins, the eater bunny…

Yes it would be great if the window didn’t brake - BUT IT DID BRAKE.

And since it did happen then yes it is going to give work to the glazier, but it is a big and rather illogical step from there to claiming that it would be a good thing to smash all windows on purpose.

Keynesian ideas work perfectly ok without accidents they don’t need accidents BUT it is an economic system that prepares for bad things happen rather than just hoping they will not and telling people to spend the money that could be used to be prepared causing them great hardship when the inevitable bad then does happen.

But if the baker is prepared, he has budgeted in the assurance payments and separately saved up for the coat so when the accident happens the assurance pays for the window and he still has the money for the coat. Unless you are saying (as you seem to) that the baker shouldn’t be prepared and not spend his money on insurance but on other things?

 

Actually, the choice of god to break the window or not is perfectly rational and applies to the real world.
God in this scenario is the politician who is trying to decide whether or not to give a stimulus package to the Glazier's company. You'd argue that the stimulus package (breaking the window) would give business to the glazier, which in turn would give business to some other merchant, who would take that money and spend it on yet more merchants... in an ever widening arc.
However, if God decided not to break the window (or politician give the stimulus package), and leave the money in the hands of the insurance company (or the tax payer), the insurance company would have probably expanded, which would create jobs, who would take their income and spend it on merchants, who would in turn go and spend that on more merchants.. in an ever widening arc.

Thereby, if you were God... or a politician.. wouldn't you agree that breaking the window, (or giving out the stimulus), your not really adding anything to the economy, merely shifting resources from one potential path to another?

So you're god, which would you chose.. to break the window or not Balbus? Simple question.

 

Wrong

Sorry the action has already occurred, your ‘god’ has already acted – the window is broken

Again you seem to be demanding that I (and everyone else) must only see things you present as you see them.

As I made clear - if you want say manufacturing to remain stable or improve in an economic down turn it might be a good thing to give it assistance.

The stimulus package (the payout of the insurers) would only come in response to the broken window (the economic down turn) if the window doesn’t break a payout by the insurers isn’t needed.

BUT THE WINDOW DID BRAKE

 

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Ummm.. breaking the window represents the actual act of doling out the stimulus. There is nothing that represents an economic downturn in the parable...

Remove the window from the equation, its confusing you. Say a robber sneaks into the bakers house, steals $50 and goes and buys himself a new window from a glazier, to add to his new house. Is that a boon to the economy? Yes or no

You've yet to answer a single question I've asked by the way, and they're extremely straight forward too.

 

To the contrary Bal, I provided you with definitions as you requested, but like you say, it is relative to where you live, so there can be those earning $10,000 per year living quite well, and others earning $30,000 per year who are living in poverty, and you don't need to leave the U.S. and compare to Bombay to point that out. That's just another reason I think the Federal government should leave the problem of poverty to the citizens of the States and local governments to resolve as they find necessary.

Do you have a clue to what poverty is in New York City, Chicago, San Francisco, Buford Wyoming, or Parrott, Georgia? Admittedly I don't, but I'm certain it is quite different for each of them.

Basically, about all you can say about poverty is it is the lack of ones essential needs of life, and even that can vary somewhat for each individual.

But much more important than how we each wish to define poverty, we should be giving attention to how it can be reduced in a way that doesn't create greater debt and higher taxes for both current and future generations to contend with.

 

Wrong

Ok can we agree that in the story you present the window has been broken?

 

Perhaps you should ask that question of YoMama who titled the thread, but my take reading the OP is that the number of persons living in the Federal government defined condition of poverty, which entitles them to receive government benefits has remained relatively unchanged while the spending has increased dramatically.

 

Well ur confusing what the window represents, so I think it's best to explain it another way. I mean obviously after a window breaks, there is a need to repair it, you're still missing the idea. Take the robber situation, would THAT be a boon?

 

We now have an indoor toilet, although one you have to manually pour water in to flush. We do also have a fridge and a TV, but no car, but we don't consider ourselves living in poverty. However if you were to visit, I'm sure you would feel as though you were living in poverty compared to how you are living in GB or the U.S., as I would myself were I living in the same condition in the U.S.

 

Yeah I think that's the generally accepted definition of poverty, and what pretty much everyone is referring to when talking about "poverty levels"...

 

The broken window is a loss no matter how you look at it from the point of view of the baker.

 

Wrong

Well you originally seemed to have had -

Now it is morphed into –

OH well

To the original statement I asked - Ok can we agree that in the story you present the window has been broken?

Now the changed one -

I think the problem is that you are not thinking through what is being said and instead going off on ideologically driven rants.

I mean you produced the story in response to me saying - if you want say manufacturing to remain stable or improve in an economic down turn it might be a good thing to give it assistance.

Which clearly states - in an economic down turn

I also asked you to read - Utopia, no just Keynes
http://www.hipforums.com/newforums/s...d.php?t=328353

It’s not my fault if your parable wasn’t up to the task of addressing what was said.

Then the premise of the parable - you’ve said - God in this scenario is the politician who is trying to decide whether or not to give a stimulus package to the Glazier's company (or break the bakers window).

Which to me begs the question why does the glazier need assistance; there is no mention of the glazier being in trouble. I mean what is the glaziers problem because that is going to strongly influence what help should be given. I mean if the problem is that he needs new equipment (and can’t afford it) and so cannot keep up with demand, rather than been happy at the bakers broken window he might curse it.

As I’ve said the only person for which anything has gone wrong and may need help is the baker.

Now your recommendation to the baker seems to be not to have any insurance and hope not to have any accidents, and my recommendation is that the baker had insurance. Which do you think is the best recommendation?

Basically its clear this window parable isn’t fit for purpose (so no wonder you are try to drop it) and you seem totally unable to address the criticisms of it so you seem to be trying to begin a new story, but that doesn’t mean the criticisms outstanding go away it just make them seem even more valid.

 

Wrong

LOL – I think anyone reading the above posts will see that it is not any confusion on may part but your inability to defend you story from criticisms that seems to be behind your desire to remove the window parable from the equation.

So no, I don’t want to remove it, I want you to address the criticisms of it.

 

Wrong

Wrong why not just come out with it – in your opinion ‘government’ should not try and help an economy even in an economic down turn. You think that otherwise viable businesses that yet into trouble in such times should just be allowed to crash?

That such help given by government is theft from those that maybe, might, possibly invest it in such things at some time or other.

So to you in the last financial crash you would have let the banks collapse? And any businesses that depended on them for cash flow or investment would also have been let go?

Lets have two versions of another story –

The town is suffering a down turn the glazier needs new equipment and the money to expand to cover demand but money is tight and the banks will not lend him the money – the town council see his problem and realise the benefit having such a business in town use public money to buy into his firm. This allows him to expand take on new workers and so cover the demands of the town’s folk. Later when things are better and new house are built or old ones extended the glazier is richer and begins exporting glass to other towns. He buys out the council (who make a profit for the town).

Second story -

The town is suffering a down turn the glazier needs new equipment and the money to help cover demand but money is tight and the banks have closed and so nothing happens. People’s windows break and the glazier get further behind. The town’s people import glass from other places and the town’s glazier goes bust. Later when things are better and new house are built or old ones extended, with no glazier in town a lot of the towns peoples money is spent importing glass from elsewhere.

 

Actually, I produced the story to reinforce the below statement, which you seem entirely incapable of addressing:
A manufacturing subsidy will indeed improve manufacturing, however you must look at both sides of the coin. You've committed the classic economic fallacy of looking at the visible effects of a policy, and not the effects that are not visible. The money that goes to aide manufacturing is funded by other sectors of the economy (via taxation or inflation)... so artificially bolstering one industry can only be done at the expense of others.....This is called "The Broken Window Fallacy", and is the one of many pitfalls of the Keynesian paradigm. Government spending has never, and never will, create prosperity. (See Economics in One Lession, by Henry Hazlitt)

It was cited as an easy to understand illustration of the above concept. And the concept, has NOTHING to do with an economic downturn, but the actual act of doling out a subsidy, as I said. Once you bring up a criticism to the above concept, I will address it. Up until now, I've been trying different methods of helping you to understand it (as you cannot seem to properly characterize it in a single post). So again, bring up a criticism of this, The money that goes to aide manufacturing is funded by other sectors of the economy (via taxation or inflation)... so artificially bolstering one industry can only be done at the expense of others, which is, and has always been, my entire critique of your manufacturing subsidy, and I will be happy to address it.

I think I've been pretty clear on my position on this. YES, I'd have let the banks, AIG, GM, and any other business fail that the market demanded. As long as we continue to prop up failing businesses, our economy will continue to suffer. Unemployment will continue to be high, job creation low, and growth non-existent. Because as I've attempted to explain to you, any "assistance" the government gives to those companies, MUST invariably be extracted from other companies. So we're just continuing bad businesses, at the expense of good ones. It's the exact same thing Hoover and FDR did that prolonged/created the Great Depression. A business failing doesn't mean that it's capital disappears... New owners take over, or the capital is reallocated. And you clearly don't understand how bankruptcy works if you think every one those banks' depositors would have lost all their money. (But alas, the last few pages of posts have removed my willingness to explain anything to you, so I'm not going into it)

Whats your take on Japan? Following their stock market crash in 1990, they unwaveringly did the Keynesian formula to make their economic slump "not so bad". Stimulus after stimulus, endless bailouts, gave their economy plenty of "liquidity" by keeping interest rates low. The results: A lost decade of growth, abd debt that equals 200% of GDP. What went wrong there? (in your opinion)

France recently elected a socialist president Francois Hollande, whose raised the top tax bracket to 75%. In your opinion, whats in store for them? A new age of economic prosperity? A massive expansion of their middle class? I'm just curious about what your predictions are.

 

It would be interesting to know exactly what ALL we are talking about when using the term 'welfare'. Personally, I tend to omit social security, medicare, and short term unemployment benefits, as they are funded, however inadequately, by their recipients.

Maybe if we had a list we all agreed upon, we could tackle them one at a time?

 

I just had a discussion about that with my mother lol... She was saying that social security wasn't an entitlement because, at least in theory, you pay into it your entire life. I agree, I wouldn't technically call it a welfare program, or an entitlement program either. However, Iit still falls into the category of a failed, unsustainable, government program. And current workers are having to fund current recipients, so the money being dolled out actually IS being paid by other people than those receiving it.

'welfare', by my definition, would be any kind of governmental assistance to the poor. Like food stamps, housing, medicaid, TANF, child care assistance, and also the disability portion of social security, etc.

I think we should talk about public housing first, and the fabulous benefits it's bestowed on our lower class (not)

 

The 1st scenario: If he's a capable glazier, and there is a high demand for the work, why won't the banks (or other private investors) give him a loan?

The 2nd scenario: if they are importing glass from elsewhere for more than the glazier could previously produce it domestically. What's stopping a business man, investor, or someone else with capital from either getting in the business himself, or investing money in the unemployed glazier to start up again?