Friday, April 28, 2017

Magical Thinking



When I was a young lad in the environmentally conscious 1970s, I was at my cousins' house one day with my younger brother. Looking for something to do, the older cousin (probably a teenager) suggested we have a design contest. Each younger cousin would draw out a plan for helping reduce pollution problems (yeah, a weird game, I know), and then the older cousin would be the judge and announce a winner.

I jumped right on this and started laying out a complex underground fan system that would draw pollution out of the air through a series of fans and vents, blowing the pollution underground through the sewer lines to a completely sealed container of some sort. As a ~eight year old, I was pretty impressed with my engineering problem-solving prowess.

My younger brother, on the other hand, had only managed to do this: He drew a big red button and when you pushed the button, pollution disappeared, he said. Poof! Of course, I scoffed at such a childish answer.

The time came and we presented our plans to the older cousin and... she said that my younger brother won!

"W-what?!" I sputtered. "That isn't a plan! It's a wish! There's nothing to say why it works, it's not a real solution!" There was no convincing the judge of the righteousness of my reasoning.

I have been reminded of this story this year, pretty much every time that Trump or one of his supporters says things like, "No one knew how hard it would be to come up with a great healthcare system" or, "This being president is more difficult than you'd think!" or, "Here's what we're going to do: We're going to SOLVE the problem with a GREAT answer. No one will believe how great the answer is. We'll just cut taxes in half! We'll just make Mexico pay for a wall! The wall will just fix things! We'll just..."

These are like my younger brother's answers. They're examples of magical thinking. "No one knew how hard it would be to find good health care solutions..."?? Of course people did! Anyone who looks at the complex problems associated with paying for health care, who has read up on the research behind the topic, who is familiar with the process of creating big policies, who has READ... anyone who has thought about it and given it some research knows things just don't magically happen.

We don't just magically "fix" the economy by cutting taxes for the wealthiest in half. Someone has to be an adult and pay for our bills. We don't just magically fix environmental issues by creating a big red button that "solves things" and then cutting all the actual regulations that do affect change.
In my brother's defense, he was probably six or seven years old. In Trump's defense... well, there is no defense.

Come on, people, wishful thinking is not a plan. A half page of bullet points is not a tax system. Dreams without plans are just wishful thinking and that is fine for children, but when it comes to national policy, we need adults in charge with adult thinking and adult solutions.

29 comments:

Marshall Art said...

Yet strangely, on the issues of health care and the economy in particular, the previous administration clearly showed no better understanding of what it takes to address either. Health care is darn near destroyed BECAUSE they felt capable of "fixing" it, while ignoring the fact that it's condition (prior to ACA) was the result of their interference in the first place. And the thought that "tax cuts for the rich" is all someone like you (or anyone center-left) can say about the economy shows you don't get that either. You apparently believe that because a business exists, it must be hard to move around within it for all the cash it has accumulated.

More to the point, you seem to confuse platitudes with actual plans. The irony (because you love irony) is that you've chosen to cite first an area where Trump's Democrat side shows most: gov't fixing health care. ACA showed there ain't no such thing.

Further, I do not believe Trump has stated that tax cuts (not just for the wealthy of course---that's just you speaking like a lunatic lefty) is the long and short of what's needed to get the economy rolling again. This is also ironic in that you're addressing these things in much the same platitude-like way of which you accuse Trump.

The greatest irony is that you think you know what an adult looks like when it comes to issues of government and politics. Even with my own reservations, I find it much too soon to jump down the guy's throat. I prefer to see more data. I seem to recall you insist upon it as well.

Anonymous said...

Here is Trump's ONE page "tax plan..."

http://www.cnn.com/2017/04/26/politics/white-house-donald-trump-tax-proposal/

I'm saying that this is not an adult plan. It's a Red Button that he hopes will somehow magically fix things. It's not detailed, it does not explain where the money will come from to pay our bills.

That's my point.

~Dan

Marshall Art said...

It looks like an overview, but at the same time, why does it have to be a thousand pages long? All legislation should be easy for the average American to get through and understand. And by the way, it clearly speaks of eliminating certain aspects that ONLY benefit the wealthy, so that "tax cuts for the rich" whine is baseless.

As to where the money comes from to pay for all that the federal government has no business involving itself in in the first place, it comes from a growing economy that this plan seeks to stimulate. Such has been the case every time a president of the past has reduced tax rates.

Anonymous said...

By all means, grow the economy, then cut taxes. But if I have $50,000 of outgoing payments every month and $50,000 of income,it would be irresponsible to cut my income to $30,000 with the hopes that somehow, magically an extra $20,000 will appear without a proven assurance that the $20,000 will somehow appear. That's just not an adult level of responsibility. Trump has to put on his big boy pants and act responsibly.

Dan

Anonymous said...

Some data about tax cuts and returns...

http://www.npr.org/sections/itsallpolitics/2015/10/30/452905475/fact-check-do-tax-cuts-grow-the-economy

Dan

Craig said...

You do realize that your link makes the point that virtually all economists agree that tax cuts can cause economic growth.

But why mess with this robust (sub 2%) economic growth that the high tax/high regulation P-BO economy has given us. The fact is that historically cutting taxes has led to increased government revenues as well as economic growth. It's strange that you demand " proven assurance" in this case, but don't demand similar "proven assurance" that tax increases will do what people claim they do. Heaven forbid, that our government might actually have to engage in some fiscal discipline.

As to your household income analogy, I can only assume that you would agree that it would be a mistake for me to spend $500,000 per year if I only earned $50,000 per year. Oh, and it's a bad analogy. Tax cuts don't remove money from the economy, they increase the amount of money circulating in the economy, which drives economic growth, which results in more revenue. As we have seen, increasing taxes removes money from the economy, which limits economic growth to the pathetic rates we've seen over that past few years.


Craig said...

http://www.heritage.org/taxes/report/the-historical-lessons-lower-tax-rates

http://www.investors.com/politics/perspective/data-debunk-deficit-exploding-tax-cuts-myth/

Anonymous said...

Tax cuts remove money from the government budget. Simple reality. They are betting that IF they cut taxes to, say, 15% instead of 30%, and thereby remove, say, $100 billion from government income, that THEN (maybe) there will be extra income to the government from resulting spending.

That's a bet with no assurance of money.

The data I cited said that MAYBE there will be SOME increased income to the government coffers but it's not a sure bet and certainly not a sure bet that it would be enough to replace what was removed.

Again, adults pay their bills and don't make plans on paying their debts on unsure bets.

My analogy is apt. Perhaps you're just not understanding the point?

Dan

Craig said...

The problem with your assertion is that it conflates the government with the economy. Money that goes to the government doesn't grow the economy.

I have to point out a few falsehoods.

1. Trump had not proposed a tax cut for the rich ( at least not specifically targeted).
2. The reductions in rates is offset by eliminating deductions and loopholes.
3. It's truely magical thinking to believe that taxing the income of the rich can ever provide meaningful revenue increases.
4. That a more complex tax code is somehow preferable to a simpler tax code.
5. Raising taxes on income makes it exponentially more difficult for those without wealth and/or significant equity to acquire those things.

But it's easier to just parrot the "tax cuts for the rich" party line than to acknowledge the lackluster economic performance of the last few years, have a rational discussion of tax policy, and try to increase economic performance.

So let's just embrace the simplistic sloganeering at the expense of actually making changes.

Anonymous said...

Craig...

The problem with your assertion is that it conflates the government with the economy. Money that goes to the government doesn't grow the economy.

I still don't think you're understanding what I'm saying.

Let's just deal with round numbers:

The gov't has a budget of, say, $1 million. That is, these are the bills that gov't has to pay to meet our obligations.

President X says, "Let's cut taxes (primarily on the rich), so that instead of our $1 million income, we'll only have $600,000. This will be okay because I'm betting that we'll make back the extra $400,000 in all the spending that will happen with the tax cuts!"

So, at this point, the gov't is NO LONGER ABLE TO PAY THEIR bills until and unless the "extra spending" actually happens and in sufficient amount to make up the difference. But that is not assured.

Again, it is responsible to have plans that include the means to pay your bills on something more than a bet.

Do you now understand the point I'm making?

As to this:

2. The reductions in rates is offset by eliminating deductions and loopholes.

Not in Trump's one page Wish List.

Instead...

"the most immediate controversy is likely to focus on cost. The Committee for a Responsible Federal Budget released a rough analysis saying the plan could cost $3 trillion to $7 trillion over the next decade -- potentially “harming economic growth instead of boosting it.”

and...

"Treasury Secretary Steven Mnuchin said during a White House briefing to roll out the plan Wednesday that it would lead to rapid economic growth, helping to cover the cost of the cuts -- but many tax experts disagree. “No tax cut has ever been self-financing,” wrote Howard Gleckman, a senior fellow at the Urban-Brookings Tax Policy Center..."

https://www.bloomberg.com/politics/articles/2017-04-26/trump-s-tax-plan-pitches-rate-cuts-for-all-with-scant-detail

~Dan

Craig said...

Problem #1, the government already can't pay it's bills and no amount of increased taxation can change that.

Problem #2. Your overly simplistic version of the tax proposal is not accurate.

Problem 3. There is no plan by which the government can pay its bills, let alone meet future obligations.

I do understand your point, that's why I keep pointing out the problems with your simplistic misrepresentation of Trump's proposal.

They've been clear about getting rid of deductions.

I've posted links to sources that disagree, but you haven't refuted those, nor demonstrated why the sources you cite are more trustworthy.

As long as you misrepresent things and live under the delusion that government spending absolutely must continue at this level, that high taxation and high government spending are good for economic growth, and that it's possible to tax the "rich" enough to make a fiscal difference, you really have very little credibility on this issue.

One might say that thinking that its mathematicallly possible to increase the income tax on "the rich" enough to make a dent in government spending is engaging is magical thinking.

Marshall Art said...

Here's another link that I hope Dan will actually read. Note the sources the writer cites.

It is also helpful to remember that along with tax cuts, spending cuts are essential as well, particularly when the revenues from tax cuts increase (Dems, as well as too many Repubs, like to spend when revenues rise).

Let's say one makes 60K per year, and has successfully managed to live comfortably within that income. There are any number of things that can occur that can disrupt the budget by which one lives one's life. Food, utilities, gas for the car, insurance (yeah, even insurance) can go up. Now what? If the income cannot be increased, then spending has to be adjusted. That adjustment includes reducing spending where one can, such as, say, eliminating cable TV, or at least the premium channels. Limiting where one drives, or how often, in order to reduce fuel expenses. Repairing rather than replacing defective appliances or tools or clothes.

Tax rate reductions, at worst, are no different than if one changes jobs, taking a pay cut in the process knowing that a higher wage will be had in the long run. One must tighten the belt at home until one has worked the new job long enough to qualify for the increase in pay.

But government, particularly that faction of government we call "Democrats", cannot handle the thought of reduced spending as spending more and more is how they bribe the foolish among us to support them at the polls. Sure, they'll agree to cut things we need the federal government to do, like strengthening and maintaining the military...defending our borders, etc. But overall, they want to raise taxes (not only on the wealthy, though that's what they say), so that they can spend more on that which the federal government has no Constitutional mandate or obligation to do.

There is no way to tax our way to prosperity, because doing so only takes money away from that which generates more money that makes us prosperous...the private sector.

Craig said...

I also think that the rhetorical trick of attacking "the rich", for not paying their "fair share", while ignoring the fact that taxing high income doesn't actually target "the rich" can't be ignored. People with high incomes aren't necessarily rich (wealthy), and if you own a small business it's even more misleading. High income earners already pay a disproportionate share of income taxes, and raising their rates can't generate enough revenue to make a difference.

In the same way, absurdly high corporate tax rates are stopping companies from repatriation of overseas income and encourage some companies to relocate to other countries.

I guess the logic is "If we can't tax that money at really high rates, we'd just as soon get nothing.".

Marshall Art said...

You say "rhetorical trick". I say intentional lie. Dems must swear to repeat it regularly in order to get their nifty decoder ring.

Here's another commentary on the subject from the brilliant Thomas Sowell.

Anonymous said...

1. I have not attacked the rich. What I said (ALL I said about the wealthy) is that "We don't just magically "fix" the economy by cutting taxes for the wealthiest in half."

That's it. Nothing more. YOU two have kept reinserting the wealthy into this conversation but that's all I said, and it's not an attack. We factually do NOT magically fix the economy by cutting taxes for the wealthiest in half. Or at least there's no evidence of it.

Do you two recognize that this is not an attack? That I have not, in fact, "attacked" the rich in this post? At worst, I offered an opinion about taxes and paying bills, but that this simply does not rise to the level of an attack, not in the least?

Given that, the vast majority of what you two are talking about is not related to anything I have said in this post.

2. What I DID say is that we have to pay our bills and we don't pay our bills by cutting the income. If you two think that somehow we can magically pay bills (our outgo) by significantly cutting our income, please explain this magic.

Economists have stated (if you read my citations) that this "plan" of Trump's (ie, the one page bullet list of wishes) appears to only add a huge amount to our deficit. Or, as some have noted, there simply isn't enough meat on this "plan" to say, but it appears on the face of it to only add to the debt.

Do you all disagree with those economists?

Here's more data from economists, in response to Marshall's citation about the Bush tax cuts...

http://www.cbpp.org/research/economic-downturn-and-legacy-of-bush-policies-continue-to-drive-large-deficits

...that shows the increase in the deficit due to Bush's tax cuts (and his wars).

~Dan

Anonymous said...

Do Tax Cuts Pay for Themselves?

"The new Republican-appointed director of the Congressional Budget Office delivered some bad news on Tuesday to the party's "Reaganomics" devotees: Tax cuts don't pay for themselves through turbocharged economic growth.

Keith Hall, who served as an economic adviser to former President George W. Bush, made the pronouncement at his first news conference after the CBO reduced its 2015 budget deficit forecast by $60 billion.

"No, the evidence is that tax cuts do not pay for themselves," Hall said in response to a reporter's question. "And our models that we're doing, our macroeconomic effects, show that."

http://www.reuters.com/article/us-usa-tax-cuts-idUSKCN0QU2FB20150825


"At current tax rates, the direct revenue loss from tax cuts almost always exceeds the indirect gain from increased activity or reduced tax avoidance. Tax cuts can, however, partly pay for themselves. How much depends on how people respond to tax changes."

NOTE: "PARTIALLY pay for themselves" is not "pay for themselves." Just to be clear.

http://www.taxpolicycenter.org/briefing-book/do-tax-cuts-pay-themselves

"Some advocates of tax cuts have suggested such cuts will not lose revenue since they will spur economic growth and thus produce enough additional tax revenue to pay for the direct cost of the cuts. Although it is theoretically possible for tax rates to be so high and disruptive that a rate cut would pay for itself, there is practically no evidence to suggest this would occur with today’s tax code."

http://www.crfb.org/blogs/do-tax-cuts-pay-themselves

I could do this all day.

Merely cutting taxes does not pay for itself.

I fully support simplifying the tax system (abolishing all loopholes that specifically benefit the wealthiest of us, for instance). IF one can abolish all loopholes for the wealthiest and, thereby generating, say, 10 billion extra dollars, then I'm fine with a cut in the tax rate of approximately the same.

No one is opposed in theory to making things simpler. I fully support it.

My point is that we can't reduce our income by, say, $100 billion without an adult, reliable plan (ie, not wishful thinking) to pay for it. That's all.

Is that really controversial to you? Or are you thinking I'm saying something other than I'm saying?

Really, ALL I'm calling for in this post is responsibility in paying our bills. That should be something we all unite behind.

~Dan

Anonymous said...

Let me put it another way: IF Trump made proposals (actual plans, not a one page wish list, without any details or explanation of how it would work) and the experts said that it would increase the US deficit by even "just" $10 million (much less the , would you want that fixed? Or are you okay with plans that call for an increase in the deficit?

(or, as estimated by some, what if it increased the deficit by $3 T-T-Trillion?... would you then oppose it?)

"Unfortunately, it seems the administration is using economic growth like magic beans — the cheap solution to all our problems," said Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget. "But there is no golden goose at the top of the tax cut beanstalk, just mountains of debt."

Trump's plan resembles aspects of the tax ideas he campaigned on last year. The right-learning Tax Foundation estimated that, even after accounting for growth, the Trump campaign plan would put a $2.6 to $3.9 trillion hole in the budget over 10 years.


http://www.reuters.com/article/us-usa-tax-cuts-idUSKCN0QU2FB20150825

~Dan

Anonymous said...

Sorry about the "much less the..." line, I imagine you can make sense of that, though.

DT

Craig said...

1. We can't fix the economy by increasing taxes on the wealthy. First, because we don't tax wealth. Second, because there is not enough money available from high income people to make any substantial difference.

2. There is no "tax cut for the rich", there is a proposal to cut taxes for all, not specifically "the rich". Further, cutting tax rates and eliminating deductions will potentially result in "the rich" paying an even more disproportionate share of the total tax burden.

2. We don't pay our bills and haven't for years. The 8 years of P-BO didn't involve any significant bill paying. For you to act as if being fiscally responsible is something that had been the case and now isn't us just disingenuous. If you want to argue against history and make your case that increases in revenue and growth to the economy are impossible to achieve by lowering and simplifying the tax system across the board, then make that case. But acting as if this is some new unprecedented crazy scheme and as if we have been paying our bills up to this point is foolishness.

The fact is that there are plenty of economists on either side of the issue and given historical precedent it's a rational strategy. Just be honest and accurate when you talk about things.

Marshall Art said...

Regarding your links, none of them provided any real world example to substantiate the claim that tax cuts "don't pay for themselves", which really wasn't the point of any of my links. THAT point was simply that more revenues are generated by the cutting of tax rates due to their positive effects on the ability of the private sector to grow and expand. THAT is how tax rate cuts benefit all.

As to "paying the bills", your links say nothing about the increase in spending that occurs simply because Democrats exist and too many Republicans act like Democrats when new money comes into play. You also don't seem to understand that it is necessary to simply stop paying for somethings, particularly those that aren't the business of the federal government to be doing in the first place.

My links demonstrated that cutting rates resulted in MORE revenues to the federal government. One referenced the Bush years in particular. YOU responded with a piece that deals with Obama years, blaming Bush policies to absolve him. While that's an entirely different argument, it does nothing to mitigate the point of my links, which is that cutting taxes increases revenues. You prefer to believe, apparently (as do so many of the covetous left), that cutting rates has no effect other than to reduce revenues, as if there is no effect on the behavior of those for whom the tax rate cuts benefited directly. If that was the case, you'd be correct. But it simply doesn't work that way.

As to "closing loopholes for the wealthy" (though you're not attacking the wealthy), the term "loophole" is misleading, purposely so, and honest people do not look at deductions as "loopholes". A true loophole would be any deduction that is not strictly defined so that gray areas exist. But most deductions are designed to recognize risk or behaviors that lead to desired outcomes. Most "loopholes" are merely that and are that which are available to anyone who is willing to risk as well. Without those deductions, further stagnation of economic growth would occur. They are not, as lefties like yourself like to imagine, "gifts" to the wealthy.

Craig said...

If also suggest the possibility that hasn't occurred to the anti-Trumpers, that this is the opening of a negotiation. I realize that when compromises aren't a big part of your political philosophy that it may be a tough thing to grasp. But it's clearly more fun to simply repeat "Trump is evil." over and over, rather than to present a counter proposal and negotiate like adults.

Anonymous said...

Of course it is possible. It's entirely possible that he's not a moron, that it's all an act.

And if someone were saying, "I'm going to drop a nuke on North Korea if they don't go along with what I demand," it could be possible that it's a bluff and he's not actually evil.

In either case, if someone is acting and advocating irresponsible, irrational, dangerous, evil or deadly actions, responsible, moral people have a responsibility to call such behavior/policies for what they are.

I'm not going to bet that the man calling for nuking people is bluffing and give him a pass, and I'm not going to bet that the idiot calling for irresponsible cuts is bluffing and give him a pass.

I hope you wouldn't either.

~Dan

Craig said...

Interesting that you're completely unwilling to even accept any possibility short of malevolent. Clearly history shows us that bluff, hyperbole, and negotiating are all parts of governing.

I've given no one a pass, I'm just willing to open my mind to possibilities beyond,magic, evil, moron, irrational, and irresponsible.

Maybe you should try it sometime.

Anonymous said...

? I have not limited the possibilities. I'm just not inclined, when someone is advocating irresponsible/bad policy or behavior, to do much beyond take them at their word.

The point is, it is irresponsible to cut your income beyond your expenses. Whatever his motivations are, what he is advocating is bad and irrational policy.

Dan

Craig said...

As yes, you've chosen not to entertain any possibilities beyond the malevolent.

You continue to pretend that our current situation is one where our "income" exceeds our "liabilities" and not surprisingly offer no criticism of the last 8 years nor an alternative.

It's much easier to simply complain, even more so when one only complains about those one hates.

Anonymous said...

Craig, I've answered your questions and corrected your misunderstandings now several times. You're still not understanding my point (or at least, that is what your words indicate). I don't know how to help you understand any better. As always, perhaps it's best to just say, "Dan thinks X," when I say directly "X" and don't extend your guesses as to what else I mean beyond X specifically.

You almost always get it wrong.

Perhaps better, if I say X and you think, "That means Dan must also think Y and Z," then you can probably safely assume that I do not think that and you'd be more often correct. And I mean that literally.

~Dan

Craig said...

So when you express concern about income being beyond expenses, that's something you've consistently been critical of in the past? It's clear that your refusal to even consider any options beyond "Trump is evil" and other personal shots at him is your primary motivation.

I understand that when you won't consider other options, won't actually provide alternatives, and have to resort to name calling and your standard copy/paste excuses, that you've got nothing.

Anonymous said...

You are mistaken in what you think I think.

I have explained it to you, but I can't understand it for you.

Your words do not represent what I have said or believe.

Seriously, Craig, if I say X and you think, "That means Dan must also think Y and Z," then you can probably safely assume that I do not think that and you'd be more often correct. And I mean that literally.

~Dan

Craig said...

You must be out of substance if copy/paste is all you have to justify your Trump hatred. I guess your much bragged about grace only extends so far.