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DOGE's only public ledger is riddled with mistakes

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Re: DOGE's only public ledger is riddled with mistakes

#631

Post by scotty79 »

sxyuan wrote: post #248

For those who want to have a substantive discussion on the federal budget and believe these cuts are justified, I have a few questions (putting aside questions of constitutionality for this thread): 1. There are claims that federal spending is out of control. How do you square that with the fact that spending as a percentage of GDP is only slightly elevated compared to the historical average going back to at least th…

> defense and veterans (20%)

Since USA just surrendered from their role of global hegemon you can reduce this just to veterans and nukes.

Re: DOGE's only public ledger is riddled with mistakes

#632

Post by _DeadFred_ »

IAmGraydon wrote: post #588
_DeadFred_ wrote: post #521

Right in line with Umberto Eco's item 3 in his list of common features of fascism: "3. The cult of action for action’s sake. “Action being beautiful in itself, it must be taken before, or without, any previous reflection. Thinking is a form of emasculation.” https://www.openculture.com/2024/11/umberto-ecos-list-of-the...

Ok, but while I disagree with Musks actions, more than half of the 14 items don’t fit what’s currently happening.

Only meets HALF of the fascism warning signs you say? Nevermind then. Nothing to see here.

Re: DOGE's only public ledger is riddled with mistakes

#633

Post by rollinDyno »

IAmGraydon wrote: post #588
_DeadFred_ wrote: post #521

Right in line with Umberto Eco's item 3 in his list of common features of fascism: "3. The cult of action for action’s sake. “Action being beautiful in itself, it must be taken before, or without, any previous reflection. Thinking is a form of emasculation.” https://www.openculture.com/2024/11/umberto-ecos-list-of-the...

Ok, but while I disagree with Musks actions, more than half of the 14 items don’t fit what’s currently happening.

In his essay, Eco says no instance of fascism will present itself with all items. He starts out by saying that fascism is very hard to define, so the 14 item list is meant to be a soft guide more than an absolute rule book.

I am starting to accept that this is a conversation we are going to be having over and over again, even after Elon and Trump. We are rightly traumatised by the excesses of the past, so it's very easy to imagine that any slight will inevitably lead to full on fascism.

This last qualification of fascism could be key, it differentiates 20th century fascism to what we are seeing today. We don't yet know whether this new form of fascism is just as harmful. For instance, when debating about whether Elon—who meets many of the elements in Eco's list—is a nazi or not, people are having very different conversations. There is no nazi party Elon can be a member of so that's not what I've been interested in. For me it has been more about the possibility of Elon advocating the same extreme policies fascist parties did. We could say he shares some of the worldview as the white supremacists, but would he go as far as implementing a 'final solution' to remedy the diagnosis?

Re: DOGE's only public ledger is riddled with mistakes

#634

Post by Majromax »

cwalv wrote: post #502
digitaltrees wrote: post #470

Earlier quoted context omitted.

It scales linearly because the same ratio of services to people continues. There aren’t suddenly less kids to educate, less elderly that need health care or less cases in federal court as the population grows. —- As someone that has been in healthcare for 12 years it’s broken because of the corporate structure and administrative state of companies. The payors and providers share the same incentive to raise rates beca…

> It scales linearly because the same ratio of services to people continues That would be scaling with population, not GDP. > The payors and providers share the same incentive to raise rates because they each collect a percentage of premiums This must be an oversimplification. Why would insurers ever reject a claim, or spend time negotiating lower rates, if they're only incentivized to see health costs increase?

> That would be scaling with population, not GDP.

This is Baulmol's Cost Disease (https://en.wikipedia.org/wiki/Baumol_effect) in action, and it's something that advanced economies must take into account.

A barber today is not much more productive than a barber in 1900, but a haircut today costs much more than a haircut in 1900, even adjusted for goods inflation. Why is today's haircut evidently more expensive?

The answer lies in the labour supply. If haircuts didn't cost more today than in 1900, would-be barbers would work in goods-producing sectors that have seen real productivity growth and consequently 'naturally' improved wages.

In some sectors, this has led to the replacement of labour with capital. Domestic help was once hired by the ordinary middle class, but now we have kitchen and household appliances instead. We see fewer expensive hand-crafts and more factory-produced goods. Even fast food joints try to replace human service with ordering kiosks.

This replacement is much more difficult in the government sector, where transfer payments tend to relate to income rather than absolute provision of hard goods and where health-care and education are two of the sectors most affected by the Baulmol effect.

Re: DOGE's only public ledger is riddled with mistakes

#635

Post by Jedd »

JumpCrisscross wrote: post #450
Jedd wrote: post #422

Earlier quoted context omitted.

> Health insurance is orthogonal to federal spending. As an Australian looking at the USA - I'm not sure how you make that claim sincerely. Perhaps you're constraining it specifically to 'insurance', rather than the only slightly broader question of private health coverage. It still feels like a tenuous claim, given parent's valid point about health costs at the federal level, and intimation around the poor compariso…

> Perhaps you're constraining it specifically to 'insurance', rather than the only slightly broader question of private health coverage Correct. Our major uses of our $4.9tn of annual healthcare funds are 31% to hospital care, 20% to physician and clinical services and 9% to retail prescription drugs [1]. Lowering that number begins and ends with better price transparency from and efficiency in hospitals and physicia…

> Our major uses of our $4.9tn of annual healthcare funds are 31% to hospital care, 20% to physician and clinical services and 9% to retail prescription drugs.

The adjacent 'National Health Expenditures by type of service and source of funds, CY 1960-2023' paints this picture more clearly, and identifies $1.5T of that $4.9T as going to 'private health insurance'.

It's odd that you overlooked that 30% figure in your summary of major uses (or 'wealthy corporate parasitic recipients', in this case).

I think it's this bit that everyone outside of the USA can't understand the high tolerance for.

> I'm specifically saying these are separate, and that taxing the latter would strike me as fairer than raising taxes on McDonalds franchisees.

Perhaps, but perhaps try both? Anyway, as I said, the USA used to have high corporate tax rates - up until Reagan, I believe - and almost every graph showing something awful happening in the USA at some point in the past 80 years has a suspiciously consistent inflection point of Reagan. [0]

I mention this only as it relates to any proposal to reinstate higher corporate taxes. I don't think anyone's suggesting chasing large numbers of (likely already acceptably taxed) $500k franchisees are the place to focus on. I don't understand why you would assume that's what I meant.

   Between 2011 and 2020, Amazon, Facebook, Alphabet (the owner of Google),
   Netflix, Apple and Microsoft — known as the "Silicon Six" — paid roughly
   $219 billion in income taxes, which amounts to just 3.6% of their $6
   trillion-plus in total revenue.  [1]
[0] https://daughternumberthree.blogspot.com/2020/01/graphing-re...

[1] https://www.salon.com/2021/06/01/amazon-facebook-and-other-t...

Re: DOGE's only public ledger is riddled with mistakes

#636

Post by sheeshkebab »

SecretDreams wrote: post #617
stogot wrote: post #604

Earlier quoted context omitted.

> I'd much rather my money being spent on education, foreign assistance, scientific research, etc., even if there is some inefficiencies and waste, than being spent on the military (which, by the way means that the big defense contractors in the US are _subsidized by tax payers_). We all would, but given that Russia, Iran, China, and NK are aggressive states and all actively claim that the US is the enemy, and that t…

I don't think the current admin codes Russian or NK as hostile states.

They won’t have any choice soon enough - all that wishy washy they are not our enemy bullshit goes out the window with the first missile/shell/drone flying over.

Re: DOGE's only public ledger is riddled with mistakes

#637

Post by toofy »

harimau777 wrote: post #544
cwalv wrote: post #426

Earlier quoted context omitted.

> How do you square that with the fact that spending as a percentage of GDP is only slightly elevated compared to the historical average...? Why should it scale linearly with GDP? I can see an argument that it should scale linearly with population (maybe), but if GDP per capita increases, you could also expect better tech/productivity to allow gov spending per capita to decrease. > What do you think should be cut, an…

I'd argue that we shouldn't expect government expenses to be effected that much by advances in productivity. Government services largely exist to handle situations that are inherently inefficient (disability, national defense, civil rights, education, elder care, etc.). What's the argument that corporations should be laying a lower share of the GDP? Due to their greater proportionate wealth, corporations and the weal…

They absolutely benefit significantly more, from roads for shipping/traveling to educated workforce, to a more stable economy, more stable international trades, to a more stable electrical grid, plumbing, more stable buildings to house their business, and on and on etc… etc…

it’s absolutely wild to me how people fail to see how much more companies benefit from taxes.

Re: DOGE's only public ledger is riddled with mistakes

#638

Post by antihipocrat »

harimau777 wrote: post #544
cwalv wrote: post #426

Earlier quoted context omitted.

> How do you square that with the fact that spending as a percentage of GDP is only slightly elevated compared to the historical average...? Why should it scale linearly with GDP? I can see an argument that it should scale linearly with population (maybe), but if GDP per capita increases, you could also expect better tech/productivity to allow gov spending per capita to decrease. > What do you think should be cut, an…

I'd argue that we shouldn't expect government expenses to be effected that much by advances in productivity. Government services largely exist to handle situations that are inherently inefficient (disability, national defense, civil rights, education, elder care, etc.). What's the argument that corporations should be laying a lower share of the GDP? Due to their greater proportionate wealth, corporations and the weal…

Service delivery can be improved by advances in productivity for both public and private sectors equally - The difference is that the private sector is constantly focusing on reducing costs of the most expensive business areas. For most businesses this is operations/service delivery, and reducing these costs allows the business to extract higher profit and gain the flexibility to compete on price. Employees who deliver cost out effectively are also rewarded. There is risk but also high reward.

Government organisations don't have the same profit incentive as they aren't in a competitive market, nor are there any personal incentives for executives to achieve these efficiencies. Government does eventually implement productivity improvement however it lags behind the private sector, with investment in productivity only occuring once risk has effectively been eliminated.

I've worked in both sectors, and people working in each sector are equally frustrated with inefficiency and seek to improve things. The problem with government isn't really the people nor the agency nor the sector, it's that the organisation and it's people only gain rewards by improving the status of the politician running the agency.

Nowadays saying that $X billion is being spent is more important than whether it successfully achieved the outcome. The effect of this is that one politician can announce $X billion to more efficiently achieve the same outcome as another politician announcing $2X billion at half the productivity and the second politician sounds like (or can easily be spun to sound like) they are achieving more/ care more than the first. The end result is massive expenditure on very little.

Re: DOGE's only public ledger is riddled with mistakes

#639

Post by Majromax »

AnthonyMouse wrote: post #559
terribleperson wrote: post #526

Earlier quoted context omitted.

There's a lot of other data on the site the graph in 4 came from. I put together my own chart comparing corporate tax receipts to annual corporate profits, and it doesn't look any better. Looks worse, in fact. I have successfully convinced myself that corporations are not, in fact, paying their fair share. See the CPROFIT, CPATAX and FCTAX charts.

To understand what's going on here, compare corporate income tax with VAT. These are very similar taxes: A business takes its revenue and subtracts its expenses, the tax rate is applied to what's left. The distinction is that VAT is paid to the jurisdiction where the corporation's customers are, whereas corporate income tax is paid to the jurisdiction where the corporation files paperwork. It should be obvious what h…

> To understand what's going on here, compare corporate income tax with VAT.

Under classical economics, there's also another effect at work. Corporate income taxes are capital taxes, whereas the VAT is a consumption tax.

Under "spherical cow in a vacuum" economics, capital taxes wind up reducing wages in equilibrium. The idea here is that investors care about their after-tax return, and if corporate taxes (on profits) go up they'll simply forego less-profitable investments to keep the marginal return on capital at the right level. With less capital investment, workers are less productive, and under the same spherical-cow assumptions workers are paid in proportion to their marginal productivity.

Conversely, VAT is assessed on consumption but not investment because corporations receive a VAT rebate on their inputs. The same "taxes are a disincentive" effect orients the economy towards investment (on the margin) and away from consumption. Capital intensity, productivity, and wages increase in equilibrium.

Reality's messier, of course, and economic academia engages in lively debate about the real incidence of all of these taxes.

Re: DOGE's only public ledger is riddled with mistakes

#640

Post by SmirkingRevenge »

terribleperson wrote: post #408
jimmar wrote: post #326

Earlier quoted context omitted.

1. US GDP estimated GDP in 2024 is $29 trillion. According to your first source, U.S. Federal Spending was 23% of GDP. If that were reduced to the 2014-2019 average of 20%, that would trim $870 billion from federal spending. That seems like good progress toward avoiding a potential debt crisis. 2. Reduce defense overall and make the process of getting money to the needy more efficient. 3. No comment. Healthcare is me…

Are you sure about point four? Taxes on corporate profits might be indirectly passed on to consumers (e.g. corporations take advantage of the knowledge of the taxes to justify raising prices), but since goods and services are presumably already optimally priced, and taxes on profits aren't an increase to costs, they shouldn't be directly passed on. It would be an extraordinary claim to say that corporations are not p…

Shareholders often take the biggest hit from corporate taxes. Consumers can to, but in most cases I think it's primarily the shareholders. But it will vary depending on the business and the market.

And yea, not like tariffs at all.

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