The Benefits of the Fair Tax
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25-02-2014, 02:52 PM
RE: The Benefits of the Fair Tax
(25-02-2014 01:14 PM)cjlr Wrote:  Has it ever entered your analysis that exactly the same thing happens with any physically constrained currency whenever stockpiles are volatile? Such as has happened countless times through history with metal-backed currency? Or that the deflationary pressure of an expanding economy and a constrained money supply is also harmful?

OF COURSE!!! It does not matter what the money is: metal, paper, shells, anything, WHENEVER the quantity of money increases it's a transfer to whoever is receiving the new money. For example, when the conquistadors sent back massive amounts of gold from the new world to Europe, this WAS a transfer of wealth to whoever got the gold first. And everybody else paid in the form of inflation and higher prices.

MY position is consistent. It's the Keynesians who play it both ways and say "This is GREAT when I do it, and devastating when someone else does it." They'll point out how horrible it was when this happened in Europe, BUT, when THEY are the ones orchestrating the increase in the money supply, THEN, they call it "necessary stimulus". You will NEVER hear a Keynesian refer to the conquistador's rapid increase in gold money to be a positive "stimulus"!

And when the quantity of money shrinks relative to the economy, such as the onset of the great depression when the Fed hoarded the gold and shrunk the money supply, it is also devastating.

See, my position is consistent. The logic and reason are the whether no matter what you're using for money.
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25-02-2014, 04:54 PM
RE: The Benefits of the Fair Tax
(25-02-2014 02:07 PM)frankksj Wrote:  If I ask a Java developer a basic question, like 'what about memory usage?', he's never going to run off in a rage telling me he refuses to answer such a question. No, he'll say, "Ok, you have a point, Java uses more memory, but it's worth it because...."

...unless you know what you're doing in Java, then the fact it uses pass by reference instead of pass by value, can result in improved performance. Angel

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25-02-2014, 05:52 PM
RE: The Benefits of the Fair Tax
(25-02-2014 01:14 PM)cjlr Wrote:  It turns out where you were going with that is that "economics which disagrees with me is like religion and it's not a real field of science unless I'm doing it".

I started this thread to prove the point. I challenge you to come up with one basic question about software coding that I or Toadaly will find impossible to answer (although Java coders are wussies so he just might Smile ).

Or, is there one simple question like that which physicists cannot answer without looking dumb. Ditto for ANY field in science you can think of. Yet for Keynesian economics, you can come up with hundreds of simple questions like that which leave them stumped.

Contrary to your quote above, that's simply being pragmatic. It doesn't matter what the subject is we're talking about, or whether or not we agree, I'll use the same test. The only other fields I've seen, which like Keynesian economists run from even basic questions, is politics and religion. However, not all economics is like that. Milton Friedman welcomed people to throw at him their toughest challenges and no matter how much his opponent thought they had him stumped, he always had a clear, logical answer that left the other side skulking away. He treated economics like a science. If you don't know the answer to something, you open your mind and find the answer, and if the answer conflicts with your preconceived beliefs, you change your beliefs.

Why I particularly like Friedman is that, by contrast most libertarians start out on moral grounds, that we need a system which does not use force to coerce people into doing things against their will. Friedman, however, was indoctrinated in Keynes teachings and started out as a 'government is the solution' economist. He "was cured of Keynesianism" (his words) simply by looking at the empirical data which proved, moral issues aside, the economy functions better under a system which respects free will. That took humility since most economists of his standing fancy themselves as the anointed ones, and believe the way to have a prosperous economy is to use government to force the weak-minded inferior masses to do things their way, saving the people from their own stupidity. Friedman basically said "Nope, I can't possibly know what's best for each individual. The data is clear, people don't need me to make their decisions for them."
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25-02-2014, 08:43 PM
RE: The Benefits of the Fair Tax
(25-02-2014 02:07 PM)frankksj Wrote:  
(25-02-2014 01:14 PM)cjlr Wrote:  Since that is literally what she said - that the gini coefficient in that specific time and place does not account for certain important outside factors - I'm still not sure where you drew your misinterpretation from.

She said: "Toad tells you that the Gini Coefficient chart (that you've been insisting is a good measurement) is not a good measurement...". She did NOT say Gini is a good measurement of inequality, but other factors were at play, she said it is not a good measurement.


You do not understand the distinction between what I actually said and what you thought in your head.

But really. These mischaracterizations are getting very tiresome.

If you are going in insist I said something, I'm gonna need quotes (and not out of context)

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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25-02-2014, 08:50 PM
RE: The Benefits of the Fair Tax
For someone who loved Friedman so damn much, you know so very little about him.

Milton Friedman, who has died aged 94, was not the most important economist of the post-war era - that title belongs to the brilliant Paul Samuelson - but he was certainly the most controversial. Yet despite his views being championed by so many politicians on the right, it may come as a surprise that Friedman's career as a policymaker largely ended in failure.

Given his status as a long-standing hate figure, the assumption by many of the left is that his agenda was cemented into place during the Reagan and Thatcher administrations in the early 1980s, especially Friedman's well-known view that inflation is solely influenced by changes in the money supply. But very few of Friedman's most cherished proposals were ever put in to practice. Of those that were - such as monetarism - almost all turned into failure.


The great irony for Friedman's fans is that the one piece of public policy he was responsible for that was widely and internationally adopted was one that greatly increased the ability of central governments to collect taxes - a policy he later repudiated in disgust.

Obituaries of Friedman will doubtlessly sing of his successes. But close examination will show them to be few, and none unalloyed. For all his high public profile - thanks to his regular column in Newsweek and series on US television, Free To Choose, which made him into something of a star - today no mainstream academic economist is a monetarist and Friedman left no lasting school of academic heirs. Even the "Chicago school" at the University of Chicago has waned in influence, eclipsed by the mighty MIT army of economists that followed Samuelson.

Of course Friedman is greatly respected for his theoretical work as an economist, especially on his analysis of the role of money, the importance of inflation expectations in wages and employment, and perhaps his most lasting contribution (it could be argued), the permanent income hypothesis, which suggests that households take a longer view of anticipating their past and future income than previously thought. His award of a Nobel prize in economics was richly deserved - even if he was churlish in accepting it (he said after winning: "I would not want a professional judgment of my scientific work to be those seven people who selected me for the award").

In terms of the policies he inspired or influenced, however, the report card is not so glowing. His great claim, the idea that "inflation is always and everywhere a monetary phenomenon" may have set off the Monetarist versus Keynesian "econ-wars" of the late 1970s and 1980s. But Friedman's ideas of directly targeting the money supply were tried and rejected as a failure, in both the UK and the US, and Friedman himself backed away from his dogmatic earlier positions. Today, no major central bank directly targets money supply data in setting monetary policy - instead they are far more pragmatic. Even Friedman's great admirer Alan Greenspan never tied himself to the monetarist mast, preferring to keep his options open.

Friedman also railed long and hard for school vouchers to be adopted, to little avail, and his libertarian leanings provoked him to call for recreational drugs and prostitution to be legalised. He lobbied against environmental protection and regulations of all kinds, the vast majority of which were happily ignored by his friends and enemies. Even the economic reforms in Pinochet's Chile he is said to have inspired have run into trouble.

Friedman's first big role as a policy advisor came in 1964 to Barry Goldwater - the least successful Republican presidential candidate in the last 100 years. His next gig was for Richard Nixon - an unsuccessful president in a different way - although Nixon ignored him when it mattered, except when he could use Friedman as cover for politically difficult decisions, such as ending compulsory military service.

And Friedman's one success? In 1942, during world war two, Friedman actually went to work for the US government. While there he helped design the payroll tax that in Britain is known as PAYE, Pay As You Earn, and in the US as withholding tax, the system that allows the government to administer the taking of income tax directly from salaries and pay packets. Unlike everything else he argued for, withholding tax was withstood the test of time and is in use all around the world. It was the best thing that Keynesian-style government could ever have wished for, and Friedman bitterly regretted it. In his memoirs he wrote:

"It never occurred to me at the time that I was helping to develop machinery that would make possible a government that I would come to criticize severely as too large, too intrusive, too destructive of freedom. Yet, that is precisely what I was doing. [My wife] Rose has repeatedly chided me over the years about the role that I played in making possible the current overgrown government we both criticize so strongly."

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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25-02-2014, 09:22 PM
RE: The Benefits of the Fair Tax
(25-02-2014 08:50 PM)Cathym112 Wrote:  Milton Friedman...was not the most important economist of the post-war era - that title belongs to the brilliant Paul Samuelson

We're talking about the same Paul Samuelson, author of "Economics", the defacto bible for Keynesian economists, the textbook for Keynesian economics, first published in 1948 and updated 12 times through 1985, right? After a thorough study of economic systems Samuelson concluded the Soviet Union was a superior system and would outgrow and surpass the US economy within a few years. In every subsequent edition, he maintained the same brilliant prediction, but just kept pushing the date out at which the Soviet Union would be the world's #1 economy. Even right up until the Soviet Union collapsed, when it was already obvious to the average 10 year old that communism was a dismal failure and about to self-destruct, Samuelson STILL insisted it was a superior system and the Soviet Union would rebound and surpass the US within 10 years.

Friedman, on the other hand, predicted from the outset that communism would fail and the Soviet Union would collapse.

Now, who understands economic systems better? You're going to tell me it's not the one who can accurately predict how a given system will turn out?

(25-02-2014 08:50 PM)Cathym112 Wrote:  But very few of Friedman's most cherished proposals were ever put in to practice. Of those that were - such as monetarism - almost all turned into failure.

Hmmm... Remember when Chile was among the poorest and most backward of all Latin American countries, run by a ruthless dictator? And then Chile's chief economists studied under Milton Friedman at the Chicago school, and convinced Pinochet to implement Friedman's system top-to-bottom in Chile. Friedman predicted that not only would Chile turn into a huge success, since economic liberty and personal freedom are tied, once Chile had a free economy, they would have political freedom too.

Now, which latin american country has the highest per capita income? Which one has the highest per capita gdp? Which one is ranked the least corrupt? What's the only latin american member of the OECD? Which one is ranked with the most stable economy, and the highest standard of living?

Big coincidence that in every case the answer is "The one and only country that implemented Friedman's system fully."

Now, what about Paul Samuelson's precious Soviet Union, his picture-perfect example of government done right? How'd that turn out for them?

(25-02-2014 08:50 PM)Cathym112 Wrote:  His great claim, the idea that "inflation is always and everywhere a monetary phenomenon" may have set off the Monetarist versus Keynesian "econ-wars" of the late 1970s and 1980s.

Please, out of all the myriads of examples of runaway inflation we've seen this past century, please name ONE that was not a result of loose monetary policy? <crickets> Friedman has a 100% perfect track record of proving that whenever there is high inflation, it is because the money supply increased rapidly. I dare you to find one exception to that rule.

(25-02-2014 08:50 PM)Cathym112 Wrote:  Even Friedman's great admirer Alan Greenspan never tied himself to the monetarist mast, preferring to keep his options open.

No shit, because Friedman called for abolishing the Federal Reserve and explained how it was a tool to transfer massive wealth from the people to the big banks. OF COURSE all the big banks, and the central banks they own, completely rejected Friedman. Duh. But the fact that out all the 40,000 multi-national corporations in the world today, close to half are ultimately owned by the banks that own the world's central banks, I'd say Friedman got that one right too. And I'm not surprised that all the banks would diss the man who tried to stop their gravy train.

(25-02-2014 08:50 PM)Cathym112 Wrote:  Friedman also railed long and hard for school vouchers to be adopted, to little avail,

To little avail in the US. Correct, in the 1970's when the Dept of Education took over, back when the US had the finest public education system in the world, Friedman warned the US would lose that spot as decision-making was centralized. But, in many places in Western Europe, particularly Benelux and Scandanivia, they did what Friedman advocated. Belgium, for example, is all voucher-based.

Again, whose predictions turned out to be correct? Since the US rejected Friedman's advice, the US is now mediocre at best, and the countries that took his advice are near the top in all internationally standardized tests.

I will repeat: Who understands a complex system? The one who can predict in advance how things will turn out? Or the morons like Samuelson who, when they see their most praised systems collapse, just scratch their head?
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25-02-2014, 09:43 PM
RE: The Benefits of the Fair Tax
And P.S., your quote from Friedman proves my point about his humility. Early on he was a strong proponent of Keynesian economics. But, as time passed and he saw what a dismal failure it was, he did a 180 and basically said "I was wrong. I'm really sorry, I messed up and I contributed to the problem. Now here is where I made my mistakes..."

Name one other economist that has done that? All the rest, like your beloved Paul Samuelson, will desperately cling to their ideology no matter how obvious the failure. Right up until the Soviet Union collapsed, Samuelson was STILL praising it as the poster-child for Keynesian economics done right, following all Samuelson's advice. And when the whole thing collapsed, did Samuelson have the humility, like Friedman, to say "Wow, I sure got that one wrong?" Of course not, he would never admit how wrong he was. All he did was quickly revise his textbook and strip out all references to the Soviet Union so he could go on claiming he was right all along.
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25-02-2014, 10:57 PM
RE: The Benefits of the Fair Tax
(25-02-2014 05:52 PM)frankksj Wrote:  I started this thread to prove the point. I challenge you to come up with one basic question about software coding that I or Toadaly will find impossible to answer (although Java coders are wussies so he just might Smile ).

I'm a master coder. Period. If you want a c++ code-off, bring it on. Tongue

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25-02-2014, 11:17 PM
RE: The Benefits of the Fair Tax
(25-02-2014 09:22 PM)frankksj Wrote:  We're talking about the same Paul Samuelson, author of "Economics", the defacto bible for Keynesian economists, the textbook for Keynesian economics, first published in 1948 and updated 12 times through 1985, right? After a thorough study of economic systems Samuelson concluded the Soviet Union was a superior system and would outgrow and surpass the US economy within a few years.

...I don't know much about Samuelson, but Keynes was an outspoken supporter of communism, so if Samuelson is his protege, what you say would not be at all unexpected.

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26-02-2014, 06:13 AM (This post was last modified: 26-02-2014 06:19 AM by Cathym112.)
RE: The Benefits of the Fair Tax
(25-02-2014 09:43 PM)frankksj Wrote:  And P.S., your quote from Friedman proves my point about his humility. Early on he was a strong proponent of Keynesian economics. But, as time passed and he saw what a dismal failure it was, he did a 180 and basically said "I was wrong. I'm really sorry, I messed up and I contributed to the problem. Now here is where I made my mistakes..."

Name one other economist that has done that? All the rest, like your beloved Paul Samuelson, will desperately cling to their ideology no matter how obvious the failure. Right up until the Soviet Union collapsed, Samuelson was STILL praising it as the poster-child for Keynesian economics done right, following all Samuelson's advice. And when the whole thing collapsed, did Samuelson have the humility, like Friedman, to say "Wow, I sure got that one wrong?" Of course not, he would never admit how wrong he was.

Uh, every hear of a guy, only mildly famous, named John Nash? Arrogant as hell, but he admitted when he was wrong every. Single. Time.

If you think little government involvement is the key to wealth, let's look at banana republics, eh? With small flat taxes, ding ding ding...COSTA RICA. 15% flat income tax, and property tax. That's it. That's all she wrote.

Why is that country still considered 3rd world?

Perhaps you could learn something from your hero Friedman though. You still won't acknowledge when you completely mischaracterizations something tht was said, and refuse to acknowledge it even when the actual quotes are later provided

A little rudeness and disrespect can elevate a meaningless interaction to a battle of wills and add drama to an otherwise dull day - Bill Watterson
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