Monday, April 27, 2015

Benefits Do Not Equal Income


Rachel added a comment that is so confusing to me that I thought if anyone here can translate.  MinnPost Avoid a Shutdown
"Economists typically calculate that for every dollar we pay our in taxes for instance we get $2-$3 back in benefits."

Based on this we should be paying in 100% of our personal earnings, though I am still looking for the $90K check back from the government to make up for that $30,000 I sent them. The reality is that you have no tax/spend goal, you simply are happy to keep letting government control grow and taxing people with money to cover the costs incurred. I don't think that counts as a plan or goal." G2A

"Not Rational: Benefits does not equal income. The benefits you get back are increased in value because your individual purchasing power does not come even remotely close to comparing to the pooled dollars of a tax base. It's like buying in bulk, but a lot more money efficient.

It makes me chuckle that individuals who espouse "efficient" spending believe that their individual dollar is efficient. Egad. Even billionaires' dollars are pretty inefficient because they simply don't buy enough to get bulk savings. But, as individuals, they don't care because their money gets them money gets them money gets them money at that point, so they can be as inefficient as they want (get a yacht! It's the most inefficient way to spend it!) If, in fact, you want dollars to be efficient, you would be logically opposed to the uber rich. Oddly, as a liberal, I don't give a rip if the uber rich exist as long as they contribute appropriately to the society that has allowed them to be so inefficient with so much wealth. Money that isn't used drags the economy, so more of the money should be put back into circulation." Rachel

4 comments:

Sean said...

I think she's going back to Paul's claim about tax money resulting in benefits. The "benefits" being referred to here appear to be increases in GDP, not direct paybacks to taxpayers.

John said...

By the way, here was my response to her.
"Hi Rachel,
I think you have some paradigms that are very incorrect. From this comment, it seems that you believe the "Uber Rich" bury their money in their mattress. When in reality most of their money is invested in the companies that we work at and this capital allows our companies to invest in equipment, research and development, etc, thus keeping us employed. People do not become Uber Rich by letting their money sit idle.

"Money that isn't used drags the economy, so more of the money should be put back into circulation."

Then you criticize their choices when they spend what they earned. Do you think that yacht just showed up at their dock one day? It likely employeed hundreds or people during it's development, production and transport.

Do you really want a group of people deciding what you should spend your money on? No more art, nick nacks, starbucks, etc because they are inefficient." G2A

John said...

Sean,
I do not disagree that some government spending leads to great gains in the GDP of a country, however I do not think it is linear and "ever beneficial".

Having law, order, peace, good communications, good transport, relatively healthy and trained work force, etc are great for a country, it's citizens and it's GDP.

However at some tipping point the inefficiencies and wastes of the self rationalizing bureaucracy eliminate the gains from each additional dollar spent. And it is wiser to keep those dollars in the hands of the citizens.

jerrye92002 said...

How efficient is the use of $90 million tax dollars to build a Senate Office Building that's completely unnecessary and a "luxury" facility to boot? How about a light rail line that costs $1Billion to build, serves far less than 1% of commuters, and continually costs ongoing subsidies? How about a second one? And a third one?

Government spending is "efficient" only when it is spent on something that people would buy with their own money if they could. I would happily buy an aircraft carrier to keep the country safe, but I'm a little short right now so we should pool our finances to do it.

Your basic problem here is expecting rational thought from a liberal (though there are a few). They can start out that way, but like most such reasoning exercises, they inevitably reach "the point where a miracle occurs" and $1 becomes $3, or something. They may as well say that money grows on the mystical magical money tree in DC.