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re: EBC Book #1 - Economics in One Lesson by Henry Hazlitt
Posted on 6/12/17 at 6:08 pm to RedStickBR
Posted on 6/12/17 at 6:08 pm to RedStickBR
I'm not sure how far we should be going before bringing up any discussion topics.
But I've made my way through chapter 4 and haven't come across anything I disagree with or think that others might disagree with. But it's noteworthy that we still have politicians that spout some of the same talking points about creating jobs through government spending, just as there were back in the author's day.
There is this passage in chapter 4 that might be discussion worthy:
During the stimulus spending rollout in 2007 and 2008, this extra spending was not proposed to come from additional tax revenue, but through the effect of inflation by increasing our debt (also called printing more money).
It's interesting that we hear lamentations about tax cuts for the rich, when tax payers are permitted to keep more of their income, but we never hear about tax increases on the poor when inflation has a more adverse impact on the poor.
But I've made my way through chapter 4 and haven't come across anything I disagree with or think that others might disagree with. But it's noteworthy that we still have politicians that spout some of the same talking points about creating jobs through government spending, just as there were back in the author's day.
There is this passage in chapter 4 that might be discussion worthy:
quote:
Therefore, for every public job created by the bridge project a private job has been destroyed somewhere else. We can see the men employed on the bridge. We can watch them at work. The employment argument of the government spenders becomes vivid, and probably for most people convincing. But there are other things that we do not see, because, alas, they have never been permitted to come into existence. They are the jobs destroyed by the $10 million taken from the taxpayers.
During the stimulus spending rollout in 2007 and 2008, this extra spending was not proposed to come from additional tax revenue, but through the effect of inflation by increasing our debt (also called printing more money).
It's interesting that we hear lamentations about tax cuts for the rich, when tax payers are permitted to keep more of their income, but we never hear about tax increases on the poor when inflation has a more adverse impact on the poor.
This post was edited on 6/12/17 at 6:10 pm
1
Posted on 6/12/17 at 7:23 pm to Willie Stroker
Regarding government provision of certain essential services, I'm of the opinion that theoretically they should be able to provide certain services for a lower cost than the private sector - the operative word being theoretically. If you take utilities, for example, if your town gets its water from a municipal utility, the municipal utility is going to have certain advantages over the private sector, namely being exempt from property and income taxes and also having a much lower cost of capital (municipal bond financing of 2-3% is not unheard of). In addition, a private utility will often have to pay a franchise fee as a percentage of gross sales receipts that a municipal utility would also be exempt from. These factors give the municipal utility a massive competitive advantage.
Where this breaks down, though, is when you consider that the public sector is often extremely inefficient (eating into some of their competitive advantage) and often pads the pockets of their general fund with excess profits instead of passing the benefit on to customers.
It all boils down to how efficient the public sector is and whether they do indeed pass cost savings on to consumers. My experience is that the public sector often scores poorly in both regards.
Where this breaks down, though, is when you consider that the public sector is often extremely inefficient (eating into some of their competitive advantage) and often pads the pockets of their general fund with excess profits instead of passing the benefit on to customers.
It all boils down to how efficient the public sector is and whether they do indeed pass cost savings on to consumers. My experience is that the public sector often scores poorly in both regards.
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