Quote from: surhotchaperchlorome on September 22, 2013, 11:45:35 PM
(http://www.leragecomics.com/wp-content/uploads/2012/10/reform.png)
"your economy will automatically default"
no dumbass, government is the one in danger of defaulting. And frankly, it's better off that way.
Quoteno dumbass, government is the one in danger of defaulting. And frankly, it's better off that way.
If the government defaults, wouldn't that set off a chain reaction causing other sectors of the economy to fail?
Quote from: dallen68 on September 23, 2013, 04:58:06 AM
If the government defaults, wouldn't that set off a chain reaction causing other sectors of the economy to fail?
Firstly, government is not a sector of the economy, unless you consider thieves to be an economic sector.
Secondly, the only businesses or individuals who would be harmed in the medium or long term by government not paying bills are those doing unproductive things for political reasons.
QuoteFirstly, government is not a sector of the economy, unless you consider thieves to be an economic sector.
Secondly, the only businesses or individuals who would be harmed in the medium or long term by government not paying bills are those doing unproductive things for political reasons.
Firstly, the government spends more money than practically anything else (at least as one organism), which MAKES IT A SECTOR OF THE ECONOMY, regardless of the thieving.
Secondly, what about those that are doing PRODUCTIVE things for political reasons? Like say...manufacturing M-16s? Or Jets, Or Tanks, or being janitors at the school...
Quote from: dallen68 on September 23, 2013, 04:58:06 AM
If the government defaults, wouldn't that set off a chain reaction causing other sectors of the economy to fail?
Broken Window Fallacy. Even if what you said is true, it wouldn't matter.
Quote from: surhotchaperchlorome on September 23, 2013, 12:33:11 PM
Broken Window Fallacy. Even if what you said is true, it wouldn't matter.
Nope, by definition, no Broken Window Fallacy on my part. A broken window fallacy is when you say *some natural disaster* (and I'll throw in anthromorphic ones for fairness sake), will improve the economy because of the costs of repairing the damage, while ignoring the contingent losses. Since I never said that...
How would it NOT matter? Granted, at the level of the economy I operate on, It probably doesn't all that much, but for the entire economy, taken as a whole, given the government-corporate whatever it is you want to call it that's going on, there would be at least significant problems.
Note: I am not saying this is how it "should be", simply that it "is". Nor am I saying these problems would be insurmountable, or anything like that, just that it would take time and resources for the other elements of the economy to adjust to the new situation. Also, the resulting worthlessness of the legal tender would create a different set of problems I didn't think of until just now.
Quote from: dallen68 on September 23, 2013, 04:58:06 AM
If the government defaults, wouldn't that set off a chain reaction causing other sectors of the economy to fail?
If the government defaults, those most affected would be those on it's payroll in some way because those are the people the government would be forced to cut loose.
This is why I warn people not to plan your life around government handouts. You're setting yourself up to be betrayed.
Quote from: Lord T Hawkeye on September 23, 2013, 01:20:18 PM
If the government defaults, those most affected would be those on it's payroll in some way because those are the people the government would be forced to cut loose.
This is why I warn people not to plan your life around government handouts. You're setting yourself up to be betrayed.
Fair enough.
Quote from: dallen68 on September 23, 2013, 01:10:55 PM
Nope, by definition, no Broken Window Fallacy on my part. A broken window fallacy is when you say *some natural disaster* (and I'll throw in anthromorphic ones for fairness sake), will improve the economy because of the costs of repairing the damage, while ignoring the contingent losses. Since I never said that...
There is absolutely nothing in the Broken Window Fallacy that says it has to be a natural disaster, and in fact there was no natural disaster in Bastiat's original parable. The essence of the Broken Window Fallacy is that the shop owner is forced, tricked, or otherwise made to spend his money some other way (repairing the window) than the way he wanted (buying a new suit), and that people do not consider the latter when examining the situation economically.
Quote from: MrBogosity
There is absolutely nothing in the Broken Window Fallacy that says it has to be a natural disaster, and in fact there was no natural disaster in Bastiat's original parable. The essence of the Broken Window Fallacy is that the shop owner is forced, tricked, or otherwise made to spend his money some other way (repairing the window) than the way he wanted (buying a new suit), and that people do not consider the latter when examining the situation economically. [/unquote]
I included possible anthromophic causes for the required undesired event; still has nothing to do with whether or not the government defaulting on it's obligations is a good thing for the economy. Even with the nit-picking, I still didn't commit a broken window fallacy.
And how do you know there *wasn't* a natural disaster that broke the window?
Quote from: dallen68 on September 23, 2013, 03:54:13 PM
And how do you know there *wasn't* a natural disaster that broke the window?
Because a boy threw a rock and broke it.
Quote from: MrBogosity on September 23, 2013, 03:57:13 PM
Because a boy threw a rock and broke it.
Okay. Anthromorphic causes then.
Also, it occurs to me that the parable isn't a very good illustration of the idea. There is nothing that says you can't grab a broom, clean up the glass, tape some vapor barrier over the window-sized hole (about $0.45 a square foot), and buy the suit.
Vapor barrier is a thick sheet of plastic, in case anyone is wondering.
Quote from: dallen68 on September 23, 2013, 04:18:14 PM
Also, it occurs to me that the parable isn't a very good illustration of the idea. There is nothing that says you can't grab a broom, clean up the glass, tape some vapor barrier over the window-sized hole (about $0.45 a square foot), and buy the suit.
That's still a loss of wealth. You're still missing a plate glass window, and a vapor barrier just isn't as good.
One way or the other, you've lost a window or you've lost a suit. NO net advantage will come from the broken window.
Quote from: dallen68 on September 23, 2013, 03:54:13 PM
There is absolutely nothing in the Broken Window Fallacy that says it has to be a natural disaster, and in fact there was no natural disaster in Bastiat's original parable. The essence of the Broken Window Fallacy is that the shop owner is forced, tricked, or otherwise made to spend his money some other way (repairing the window) than the way he wanted (buying a new suit), and that people do not consider the latter when examining the situation economically. [/unquote]
I included possible anthromophic causes for the required undesired event; still has nothing to do with whether or not the government defaulting on it's obligations is a good thing for the economy. Even with the nit-picking, I still didn't commit a broken window fallacy.
And how do you know there *wasn't* a natural disaster that broke the window?
Yes, you still did. It's still a because a broken window fallacy because you were taking into account the seen while ignoring or at least downplaying the unseen economic consequences. That's a broken window fallacy boiled down to its essence, and even if not, it's close enough.
Quote from: surhotchaperchlorome on September 23, 2013, 05:47:10 PM
Yes, you still did. It's still a because a broken window fallacy because you were taking into account the seen while ignoring or at least downplaying the unseen economic consequences. That's a broken window fallacy boiled down to its essence, and even if not, it's close enough.
No, I didn't. There was no seen/unseen ANYTHING being discussed. What WAS being discussed was whether or not the gov't is part of the economy, with NO COMMENT being made of any consequent value. Therefore, there was no broken window, or any other fallacy.
To recap:
someone posted a picture saying the economy is going to default in about a minute.
You said "it's the gov't that's going to default, which is the greatest thing ever!!!!" (Or close enough to it)
I said, "The gov't is part of the economy"
You said, "only if you count thieves as part of the economy"
I said, "the gov't is the single largest force in the economy; at least as far as spending goes" (I was going to make a smart-ass remark that thieves ARE in fact, part of the economy- but I was trying to not derail the conversation to much, so I resisted.) I wasn't making a comment about them being beneficial or malignant forces, simply that they do exist with in the economy.
You said, "broken window fallacy"
At no time was there any opportunity for a broken window fallacy to occur.
edit: come to think of it, if there was a "sort of resembles" a broken windows fallacy, YOU committed it when you said the gov't defaulting wouldn't have any medium or long term effects outside the "unproductive". And then the conversation went sideways.
Sorry to be that guy but can we move this to its own thread? It's getting a little out of control and I think it would be beneficial to split it off.
OK, things are getting a little heady here. I second tnu's motion, but must add this--for honesty's sake, before this is to be done:
@ Dallen68: firstly,
I'm the one who pointed out that Government (and not the economy as a whole) was the one defaulting, not Surhot.
QuoteYou said "it's the gov't that's going to default, which is the greatest thing ever!!!!" (Or close enough to it)
I did not say it would be the greatest thing ever--It didn't even come close to that in meaning (sorry, it's not "close enough"). I simply said it's
better off that way: last I checked, that was a relative term. And it's only the case since it is really just a confirmation of what everyone here already knows: The US government has practically overspent itself into bankruptcy (for lack of a better description): over 1 trillion dollar deficits a year, a debt in excess of 16 trillion dollars, and no signs of it ever going back down. And it shows, when one looks at how the "services" it provides are doing, and indirectly on the economy as a whole. Yeah, all hell may well break loose, especially in the sectors government controls the most (e.g. finance, infrastructure), but frankly, it can either break loose now, or do so later (and, arguably, with possibly worse results). The Government might as well be honest about its state of Broke and just default now. The economy will gradually recover on its own from the inevitable re-alignment in either situation, as it did after the defaulting of every government in history, provided govco doesn't screw around with it again.
Now you may continue...
Quote from: Ibrahim90 on September 24, 2013, 02:38:32 AM
OK, things are getting a little heady here. I second tnu's motion, but must add this--for honesty's sake, before this is to be done:
@ Dallen68: firstly, I'm the one who pointed out that Government (and not the economy as a whole) was the one defaulting, not Surhot.
I did not say it would be the greatest thing ever--It didn't even come close to that in meaning (sorry, it's not "close enough"). I simply said it's better off that way: last I checked, that was a relative term. And it's only the case since it is really just a confirmation of what everyone here already knows: The US government has practically overspent itself into bankruptcy (for lack of a better description): over 1 trillion dollar deficits a year, a debt in excess of 16 trillion dollars, and no signs of it ever going back down. And it shows, when one looks at how the "services" it provides are doing, and indirectly on the economy as a whole. Yeah, all hell may well break loose, especially in the sectors government controls the most (e.g. finance, infrastructure), but frankly, it can either break loose now, or do so later (and, arguably, with possibly worse results). The Government might as well be honest about its state of Broke and just default now. The economy will gradually recover on its own from the inevitable re-alignment in either situation, as it did after the defaulting of every government in history, provided govco doesn't screw around with it again.
Now you may continue...
None of which I disagree with. Although, I would suggest option C - the government undergo an ordered bankruptcy to minimize the damage. Defaulting - which means just deciding to not pay the debts- would be catastrophic now or later, at least politically. I realize that in essence doing the bankruptcy would amount to the same thing economically - but politically it would save face. One of the problems is our currency is based on the "faith and trust" (I believe the phrase is) of the U.S. Gov't; and if there is no "faith and trust", the currency is worthless.
That said, I probably went a touch overboard with that little rant - and put more on surcot than was actually warranted.
The one thing that disturbs me about the idea of defaulting is. What is the state using as collateral?
Quote from: tnu on September 24, 2013, 03:42:42 AM
The one thing that disturbs me about the idea of defaulting is. What is the state using as collateral?
Us.
Quote from: nilecroc on September 24, 2013, 10:12:01 AM
Us.
Technically, our children. Well, your children. And grandchildren. Something like that. We're spending money from 20-30 years from now, at this point.
Quote from: dallen68 on September 24, 2013, 10:51:27 AM
Technically, our children. Well, your children. And grandchildren. Something like that. We're spending money from 20-30 years from now, at this point.
We are not. The government is.
Here is a good video on the Broken Window Fallacy
[yt]gG3AKoL0vEs[/yt]
Quote from: nilecroc on September 24, 2013, 12:22:16 PM
We are not. The government is.
That's what I meant. Please don't poke the alligator.
Quote from: Skm1091 on September 24, 2013, 01:34:11 PM
Here is a good video on the Broken Window Fallacy
[yt]gG3AKoL0vEs[/yt]
So, according to this video (if I understood it right) failure to take into account things you couldn't have possibly known, or that are uncertain over things that you do know and are for sure is a fallacy? If that's the case, I'm declaring the fallacy itself a fallacy.
Quote from: dallen68 on September 24, 2013, 03:16:10 PM
So, according to this video (if I understood it right) failure to take into account things you couldn't have possibly known, or that are uncertain over things that you do know and are for sure is a fallacy? If that's the case, I'm declaring the fallacy itself a fallacy.
But you DO know that the money has to come from SOMEWHERE. That's all that's required. People pretend like this comes out of nowhere with no other expense anywhere, and THAT is the fallacy.
Quote from: MrBogosity on September 24, 2013, 03:37:19 PM
But you DO know that the money has to come from SOMEWHERE. That's all that's required. People pretend like this comes out of nowhere with no other expense anywhere, and THAT is the fallacy.
So a broken window fallacy is like a vacuum fallacy except you're talking about economics instead of resource management? (To stick to the parable, the baker now has to spend his time repairing the window instead of making bread.)
https://mises.org/books/economics_in_one_lesson_hazlitt.pdf
And to go back to the source: http://www.econlib.org/library/Bastiat/basEss1.html
Apparently Rand Paul just broke out the Bastiat on the Senate floor, reading out parts of this same essay during Senator Cruz's filibuster.
Thanks for the links.
It occurs to me, that if we apply my previously stated standard of preferring the known/existing to the unknown/possible, the only thing we have is a broken window. After that, we have a bunch of morons on the sidewalk talking out there backside about a bunch of transactions that may or may not happen. And we have a businessman talking about a suit that may or may not happen. Until there's a formulation of intent (which the suit may possibly have), such as a deposit on a window or a suit, or a contract, or some other means outside standing on the sidewalk shooting the bogons, nothing after the broken window exists as of yet.
Best case scenario:
We have a broken window.
Worst case scenario:
We have a broken window and a missing suit (depending on whether the business man had actually talked to the tailor prior to the broken window.)
Since windows are a mass production item, selling one window more or less probably won't have as much of an impact as the crowd thinks it will.
Since custom suits tend to be a boutique item, that suit may have been a significant loss for the tailor.
Quote from: MrBogosity on September 25, 2013, 09:44:29 AM
Apparently Rand Paul just broke out the Bastiat on the Senate floor, reading out parts of this same essay during Senator Cruz's filibuster.
am I the only one here completely confused as to what to think about Rand Paul?
Quote from: tnu on September 26, 2013, 04:56:03 AM
am I the only one here completely confused as to what to think about Rand Paul?
I don't know what the answer to that, but as far as I can tell, he's not worth supporting: he's just trying to appeal to the demographic his father had when he was in politics. And while he has a lot of his father's ideas, he's different in such a way that he isn't even remotely worth calling a libertarian.