Friday, September 07, 2012

Labor Market Weakness Can Be Traced to the Biggest Loss of Government Jobs Since WWII


I don't think this issue has received much (any?) attention:

Most of the weakness in the U.S. labor market, the stubbornly high unemployment rate, and the slow rate of overall job creation can be traced to the ongoing decreases in government jobs, see chart above.  

The top chart above shows that since January 2010, more than 4.5 million jobs have been created in the private sector and the employment level today is 4.3% higher than at the beginning of 2010.  Over the same period, government sector jobs have fallen by 2.6%, or by 579,000 jobs.   

In fact, the contraction of government jobs starting in 2009 (almost 700,000 through August) is the largest contraction in public sector jobs since the 1945-1947 period following WWII when government jobs contracted by 770,000 jobs, and almost twice the 392,000 government jobs lost in 1981-1982 (see bottom chart above).

From January 2009 to August 2012, there has been a loss of 533,000 local government jobs, a loss of 149,000 state government jobs and a gain of 27,000 federal jobs, for a total net decrease of 655,000 total  government jobs.    

Update: While the overall level of job creation has been slow, it’s being dragged down by the significant job losses in the public sector, especially for local government jobs. Private sector jobs have been increasing at 91,000 per month since the recession ended in June 2009. Government jobs have contracting by 18,000 per month on average over that period, which is bringing down the overall monthly job increases to only 74,000 on average. By comparison, 30,000 private jobs were added per month in the comparable period following the 2001 recession, which along with government job increases of 11,000 per month, brought the total monthly increase in employment to 41,000. During the current recovery, the private sector alone is creating more than twice as many jobs per month as were created by both the private and public sector in the recovery of 2002-2004. 

The periods following all of the last three recessions have accurately been described as “jobless recoveries.” But we should recognize that this recovery is different, because unlike the previous two jobless recoveries, we now have ongoing losses in public sector jobs. Without the losses in government jobs at the state and local levels dragging down job growth, the overall U.S. labor market would be doing much better right now. 

Perhaps the significant downsizing of government at the state and local level is a positive development for the future growth of the U.S. economy, and one benefit of the Great Recession. But we should also pay some attention to the fact that one of the reasons for the disappointing monthly employment reports is the persistent weakness in the public sector employment, which is offsetting the relatively healthy increases in private sector hiring.

158 Comments:

At 9/07/2012 10:03 AM, Blogger Buddy R Pacifico said...

"
I don't think this issue has received much (any?) attention:"


Until now. Thanks Professor for the very interesting charts you have made.

 
At 9/07/2012 10:08 AM, Blogger morganovich said...

i think it's instructive to parse this "government workforce" figure a bit further.

the job losses are pretty much all the the local and state levels.

federal jobs are WAY up from the start of the recession. they have been drifting down ever so slightly in the last few months, but by and large have been up a great deal.

"Federal employment grew 13% — 250,000 jobs — from the recession's start in December 2007 to a peak last September. During that time, private employment fell 5% and state and local governments cut staffs by 2%."

this underlines the key difference between private and state/local governments and the federal government.

companies and state governments are bound to live within their means. companies must remain solvent. states must balance their budgets. as a result, they must respond to fiscal pressures.

the federal government does not. they just run trillion dollar deficits and print themselves another pile of cash to deficit spend. doing so when you could find people to buy the bonds was bad enough, but doing it by having the fed buy them is far less disciplined and more fraught.

attempting to run a federal government while ignoring basic business rules around income and expenditure is not going to end well.

it's time to move the federal government to GAAP accounting and demand balanced budgets.

 
At 9/07/2012 10:12 AM, Blogger Mark J. Perry said...

Since Dec. 2007, federal government jobs have increased by only 48,000 jobs. through August.

 
At 9/07/2012 10:12 AM, Blogger Moe said...

Morganovich - thanks for making that clear - at state and local level I can believe the chart.

 
At 9/07/2012 10:23 AM, Blogger Methinks said...

companies and state governments are bound to live within their means. companies must remain solvent. states must balance their budgets. as a result, they must respond to fiscal pressures.

Also, unlike the federal government, states, towns and cities compete for residents. It's harder to tax their residents too much.

A California default would be a big test. If the state is bailed out by the federal government, muni bonds effectively become treasuries and states and perhaps even municipalities can begin shifting the burden of reckless spending onto all taxpayers. Then we'll really be in trouble.

 
At 9/07/2012 10:29 AM, Blogger Jeff P said...

Taking out govt decreases helps a bit, but it is not like 142K per month for the private sector is that great of a number, especially given the large decline at the beginning of the recession.

 
At 9/07/2012 10:34 AM, Blogger morganovich said...

mark-

federal employment has been dropping some since september, but it is still up since the recession began. (unlike state/local or private)

in fact, i believe it's the only one of those categories that is above pre recession levels.

this is a strong counterpoint to the "government is shrinking narrative".

my point was not that overall government jobs have not shrunk, it seems clear that they have, but rather that there has been a marked divergence between the state and local governments and the federal one.

if we can get the fed to act more like the states, then we could really be getting somewhere.

it's also interesting that "government workers" have the lowest reported unemployment rate of any industry.

http://www.bls.gov/news.release/empsit.t14.htm

this seems a surprising result given the loss in jobs.

is this just retirees not being replaced? i'm not sure how else one could account for that (apart from believing that the industry based unemployment number is somehow wrong or if the "government workforce" has shrunk dramatically)


 
At 9/07/2012 10:39 AM, Blogger bix1951 said...

great news
government jobs are the least productive jobs
in fact, often their jobs are to harass and confound the private sector
furthermore, I would guess that some governments are actually becoming more efficient, joining the productivity and efficiency revolution that is normal in the private sector.
I hope the feds also start reducing jobs. That would be terrific news for the overall economy.

 
At 9/07/2012 10:43 AM, Blogger hancke said...

This comment has been removed by the author.

 
At 9/07/2012 10:45 AM, Blogger hancke said...

If government lost 579,000 jobs and the total labor force is 154,645,000 that only equates to .3% of total unemployment. Using the loss of 700,000 is only .4% of total unemployment.

Sounds like ex-government employees should learn to build houses. That was a bubble that needed popping. State and local governments obviously needed to balance their budgets.

 
At 9/07/2012 10:52 AM, Blogger NormanB said...

Private sector jobs from 2010 have been growing at a paltry 1.6% per year and over the last six months only 580,000 private sector jobs have been created and that annualizes out to a 0.9% growth rate. Sorry, professor, a pig is a pig.

 
At 9/07/2012 11:02 AM, Blogger Jon Murphy said...

I made this chart a little while ago. Now may be a good time to share it.

Average jobs created by private sector during the last three employment expansions.

 
At 9/07/2012 11:14 AM, Blogger Jon Murphy said...

Oh, I should mention that the dates above correspond to employment peaks and troughs, not economic peaks and troughs. Employment is a lagging indicator. To use economic cycles wouldn't really make sense as we'd be comparing data to moving targets, as opposed to a set standard.

 
At 9/07/2012 11:22 AM, Blogger Ironman said...

Some quick points:

The decline of jobs at the state and local level, which hasn't occurred at the federal level, was most likely triggered by the reliance of these entities upon state and local property taxes for their funding. (Federal government jobs rely upon income taxes, payroll taxes and debt financing to fund jobs at that level, which is why these jobs have actually increased over this period of time, even though the federal government's tax collections are far below their pre-recession level.)

Since sales taxes are more stable sources of revenue for governments than even income taxes, the job declines at these levels of government is very likely tied to the decline in house values in the post-housing bubble world.

That's not necessarily a bad thing, seeing as the number of jobs at these levels of government were just as highly inflated over sustainable levels as housing prices were during the U.S. housing bubble.

Unlike the housing market though, which has been able to correct itself (seemingly at this point) by having housing prices fall to more sustainable levels, many of these jobs were lost because of the resistance of public employee labor unions to reasonable wage and benefit reductions.

Putting such a high price tag on the services of government employees at a time of declining tax collections that are needed to pay for them ensured their fate. That's also why the job losses for state and local governments are so outsized as compared to those in the private sector which isn't burdened by organized labor the way governments dealing with public employee labor unions are - they are doubly disconnected from economic reality.

 
At 9/07/2012 11:26 AM, Blogger Che is dead said...

So, let's get this straight, at a time when the federal government has spent (sorry, I meant to say "invested") more than a TRILLION dollars on economic "stimulus" - mostly aimed at securing the employment of unionized state and local government employees - the net effect has been a REDUCTION in those jobs. How much will it cost to get rid of all the bastards?

 
At 9/07/2012 11:26 AM, Blogger Larry G said...

so a comment and a question.

the comment:

since the housing crash really killed property values - it in turn, affected property tax -revenues -which in turn, necessitated some significant local-govt belt tightening.

it's not coming for free. Services are affected - like road repairs and how long it takes to get a permit, etc.

the question:

so does this mean that the private sector jobs number has recovered back to 2000 levels?

do we have a recovery except for govt jobs?

can the private sector absorb the people who got laid off from govt jobs?

 
At 9/07/2012 11:31 AM, Blogger Paul said...

Professor Mark,

There are some serious disputes over your 48,000 net federal jobs number.


CNN Money: "The number of federal employees grew by 123,000, or 6.2%, under President Obama, according to the White House's Office of Management and Budget."


ABC NEWS: "But while state and local jobs evaporated, Labor Department statistics show that the federal government , not counting the postal service, has grown by 143,000 employees during Obama’s tenure, a fact that Obama’s Republican rival Mitt Romney is quick to criticize."

Investors.com:

Payroll change since January 2008
Total: -5.01 million -3.6%
Private: -4.61 million -4%
Government: -407,000 -1.8%
Federal Government: (excluding post office) +225,000 11.4%
Sources: Labor Department, Datastream

 
At 9/07/2012 11:59 AM, Blogger morganovich said...

larry-

private payrolls have not recovered from the recession.

they peaked at 115.65mm in 1/08.

the august number of 111.4mm is still over 4 million jobs short of that.

it's not even as high as the 3/2001 figure that was achieved with a population 27 million smaller than today's.

 
At 9/07/2012 12:01 PM, Blogger Larry G said...

thanks Morg... so even though the stock market is going great guns...and a lot of indicators for manufacturing and housing are up, we still have a sick economy...



 
At 9/07/2012 12:19 PM, Blogger Methinks said...

Larry,

The stock market is not the economy.

Indications of recovery are not synonymous with a booming economy.

 
At 9/07/2012 12:23 PM, Blogger Larry G said...

all this great news about increased manufacturing.. increased domestic energy, housing markets on fire,

yadda yadda....

but the economy still STINKS!

:-)

somewhere between RAH RAH and Reality there seems to be a disconnect.

:-)

 
At 9/07/2012 12:29 PM, Blogger morganovich said...

going great guns?

the S+P is still at levels from mid 1999, flat for 13 years.

at 1436, it's well under the 1576 high form 2007.

if down 9% over the last 5 years and flat for 13 is great guns, i'd hate to see what you think a bad tape look like.

further, a lot of the rally is being driven by the fed. if you crush bond yields, money flows into stocks which look relatively better.

during normal times, the stock and bond markets can give you some useful information about the economy, but in the age of twist and zirp, they are far less useful indicators.

 
At 9/07/2012 12:38 PM, Blogger Buddy R Pacifico said...

morganovich said...

"going great guns?"

Check this out:

The Wilshire 5000 gained $350,000,000,000 in market value in August.


 
At 9/07/2012 12:47 PM, Blogger Ken said...

Larry,

so does this mean that the private sector jobs number has recovered back to 2000 levels?

do we have a recovery except for govt jobs?


No.

can the private sector absorb the people who got laid off from govt jobs?

Of course. Every resource the government gets comes from the private sector.

 
At 9/07/2012 12:47 PM, Blogger Buddy R Pacifico said...

Wilshire 5000 press release for August:

http://www.wilshire.com/ViewDocument.aspx?f=SXJG_August 2012 Wilshire Indexes News Release - 090612.pdf

 
At 9/07/2012 1:04 PM, Blogger juandos said...

Really, where is the good news?

From James Pethokoukis at AEI: Oh my, JPMorgan economist just absolutely destroys the August jobs report

 
At 9/07/2012 1:16 PM, Blogger SteveH said...

There is no new net job growth from peak private sector employment in 2007 which should be the measure. And the last time private sector employment was at 112 million was in 2000. So for 12 years no net job growth in the private sector. Sounds like surging productivity to me. Unless Obama wants to lower productivity there's not much a president can do to lower the unemployment rate. Maybe all those shovel ready jobs should have come with a spoon instead of a shovel we could have employed millions.

Also, population has grown so real job growth in the private sector is negative.

 
At 9/07/2012 1:19 PM, Blogger VangelV said...

Cities and states are going broke. They have to cut employees. The federal government is broke but it can print money so it is adding employees as politicians are trying to get elected as they kick the can down the road. The path to success is a reduction of government employees at all levels by a minimum of 85-90% as useless regulations are repealed and resources are freed to the productive sectors of the economy.

 
At 9/07/2012 1:33 PM, Blogger Methinks said...

at 1436, it's well under the 1576 high form 2007.

Oh, Morganovich, an't you be happy with the 2% Euphoria in the SPUs yesterday? Give Draghi and Bernanke a couple of days.

When the employment number came out this morning SPUs fell from up 40 bps to down 40 bps, but then everyone remembered that this just increases the probability of QE forever and cheered up. Asset prices are not allowed to drop for any reason.

 
At 9/07/2012 1:46 PM, Blogger morganovich said...

methinks-

yup. the market loves money supply growth. no question about it.

i thought you might find this amusing:

The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now – and I think people ask “how come?” – Probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis. The bumblebee would have to graduate to a real bee.”
-Mario Draghi, ECB President

Occasionally, a politician, whether by accident or design, tells the truth. This comment from the ECB looked remarkably apt to us, perhaps for more reasons than Mr. Draghi intended. Leaving aside the fairy dust in the atmosphere that kept the Euro airborne for so long and the worrying implications that the head of the ECB does not know what it was, we were struck by the number of other ways in which the European Monetary union has, of late, resembled a bee. Like the Bombus pascuorum, it has swooped around in wild sweeps through the air dive bombing everyone and making them terribly nervous as to just what it will do next be it sting someone or bounce off a window. It seems that every time the markets have breathed a sigh of relief that the bee has flown away again, it returns bringing with it much hysterical flinching and arm waving. July was no exception as our favorite Euro-Bombis were creating a great deal of uncertainty and fears driven by the huge blowouts in “club-med” bond yields which led many to prognosticate an impending disaster. However, in a far reaching press conference that was very long on conviction if not detail, the Draghi-bee announced a set of programs to cap yields and appears to have definitively tossed the ECB hat into the QE ring. This looked much more aggressive than past LTRO efforts. In the short run, this appears to have mollified markets, though in the long run, it risks taking away the pain that would actually motivate longer term structural changes and pushing the ECB out onto the sort of limb upon which the US Federal Reserve has perched itself.

we'll jump in shortly with open ended qe3. after all, just because it didn't work twice, does not mean that third time is not a charm.

 
At 9/07/2012 2:09 PM, Blogger Hell_Is_Like_Newark said...

I have noticed the city layoff on my block. The sewer grates were regularly cleaned off by a guy with a broom and trash bin. Now, the garbage just piles up (though I do clean the ones off in front of my building).

The guys who do the actually cleaning are gone. The directors who make $180k however are still around. They never seem to be laid off.. ever.

 
At 9/07/2012 2:16 PM, Blogger Methinks said...

That is amusing. Thanks. Cue QEinfinity.

 
At 9/07/2012 3:24 PM, Blogger Its GSATT said...

Dr. Perry,

After playing around with the graph you supplied about federal job quantities, I have become frustrated trying to make sense of the spike of roughly 600k jobs in a few months in 2010. I initially thought this was tax season related, but it does not occur every year. In fact the last large spike was around 2000.

Is this simply changing the classifications of the jobs to suffocate this statistic????

Anyone???

 
At 9/07/2012 3:30 PM, Blogger Its GSATT said...

the only link I found that almost had an idea was
http://www.politifact.com/truth-o-meter/statements/2011/feb/15/john-boehner/john-boehner-says-200000-new-federal-jobs-have-spr/

ya ya ya, politifact has its issues, but the thing that spiked interest is that they mentioned counting or not counting the Post Office. My lightbulb "illuminated"..........

 
At 9/07/2012 3:32 PM, Blogger Mark J. Perry said...

If you look at the graph, I've labelled that spike "2010 Census jobs," which were temporary federal jobs for the 2010 Census.

 
At 9/07/2012 4:04 PM, Blogger Hydra said...

Well, the economy should be booming since we have gotten all those useless government workers off the dole.

 
At 9/07/2012 4:12 PM, Blogger Its GSATT said...

right right the other graph..... Fail

 
At 9/07/2012 4:26 PM, Blogger VangelV said...

After playing around with the graph you supplied about federal job quantities, I have become frustrated trying to make sense of the spike of roughly 600k jobs in a few months in 2010. I initially thought this was tax season related, but it does not occur every year. In fact the last large spike was around 2000.

Census hiring of temporary workers?

 
At 9/07/2012 4:52 PM, Blogger PeakTrader said...

So, losing 700,000 government jobs, along with the services, is good news, because over 20 million Americans are unemployed or underemployed and pay less in taxes.

 
At 9/07/2012 5:17 PM, Blogger hardtimes said...

Since Dec. 2007, federal government jobs have increased by only 48,000 jobs. through August.

So during the worst recession since the great depression the Federal Govt grew. Is this really the way to run a railroad.

 
At 9/07/2012 5:36 PM, Blogger Paul said...

"Well, the economy should be booming since we have gotten all those useless government workers off the dole."

So? Federal spending is still up nearly a trillion dollars a yr since 2008.

 
At 9/07/2012 5:58 PM, Blogger Ron H. said...

Its GSATT

"After playing around with the graph you supplied about federal job quantities, I have become frustrated trying to make sense of the spike of roughly 600k jobs in a few months in 2010. I initially thought this was tax season related, but it does not occur every year. In fact the last large spike was around 2000."

Census workers?

 
At 9/07/2012 6:35 PM, Blogger juandos said...

Courtesy of Zero Hedge: Real Unemployment Rate Hits 11.7% As Spread Between Reported And Propaganda Data Hits Record

Today's reported unemployment rate: 8.1%. The reason: the labor "participation" dropped to a 31 year low 63.5% as reported earlier. Of course, this number is pure propaganda, and makes no sense for one simple reason: despite the economic collapse started in December 2007, the US civilian non-institutional population since then has grown by 186,000 people every month on average hitting an all time high of 243,566,000 in August...

 
At 9/07/2012 6:45 PM, Blogger Ron H. said...

Peak

"So, losing 700,000 government jobs, along with the services, is good news, because over 20 million Americans are unemployed or underemployed and pay less in taxes."

Are you really getting noticeably less service?

 
At 9/07/2012 6:55 PM, Blogger Ron H. said...

"So? Federal spending is still up nearly a trillion dollars a yr since 2008. "

That's due to increased government worker productivity, which is is the exact opposite of productivity in the private sector.

The amount of taxpayer money spent per government worker has more than tripled in only the last 5 years.

 
At 9/07/2012 7:08 PM, Blogger Benjamin said...

Let's cut federal employment, yes.

Here is a list of federal employers, by agency.

Federal Employment By Agency

Defense 772,601
VA 304,665
Homeland Security 183,455
Justice 117,916
Treasury 110,099
USDA 106,867
Interior 70,231
H&HS 69,839
Transportation 57,972
Commerce 56,856
State 39,016
Labor 17,592
HUD 9585
Education 4452


 
At 9/07/2012 7:10 PM, Blogger Larry G said...

good list. but you need to also add 1.5 million military.

 
At 9/07/2012 7:51 PM, Blogger Hydra said...

Perverse.

 
At 9/07/2012 7:52 PM, Blogger Buddy R Pacifico said...

In a comment above I noted that the Wilshire 5000 rose $350,000,000,000 in August.

OK, so how does that relate to other countries?

The $350 billion rise in August Wilshire 5000 alone, is greater than the GDP of 192 countries.

 
At 9/07/2012 7:56 PM, Blogger Hydra said...

Which is it that is causing capitalism to sit on its butt:

Inept regulatory interference in the good works of capitalism, by bungling government workers, or efficient government workers shoveling money as fast as possible to government contractors?

 
At 9/07/2012 7:58 PM, Blogger Carrie said...

Dr. Perry,
From my corner of the world (UM Ann Arbor), many jobs have been cut. This is largely a good thing, and most are never coming back.

The recession and accompanying budget cutting have forced efficiencies that were/are painful, but overdue.

Unfortunately for the workforce, many of these jobs are clerical/office jobs staffed by minimally educated individuals who are going to struggle to find similar paying jobs elsewhere. It's a microcosm of what is happening everywhere. I think at UM we are seeing productivity gains similar to (but lagging) the private sector.

Carrie

 
At 9/07/2012 10:12 PM, Blogger Don Culo said...

I get all my news from the only reliable source FOX News.

Obama added 130,000 federal jobs !!!!


http://www.youtube.com/watch?v=Er3Jd2f_1zM

 
At 9/07/2012 10:14 PM, Blogger Don Culo said...

I get all my news from the only reliable source FOX News.

Obama added 130,000 federal jobs !!!!


http://www.youtube.com/watch?v=Er3Jd2f_1zM

 
At 9/07/2012 10:29 PM, Blogger OBloodyHell said...

One word:


YAAAAAAAAAAAYYYYYYY!!!!!

 
At 9/07/2012 10:32 PM, Blogger OBloodyHell said...

>>>> it's time to move the federal government to GAAP accounting and demand balanced budgets.

Most especially GAAP. As the NY State folderol with regards to Attica prison shows, a balanced budget requirement with funny-money accounting practices is useless.

 
At 9/07/2012 10:40 PM, Blogger OBloodyHell said...

>>> The guys who do the actually cleaning are gone. The directors who make $180k however are still around. They never seem to be laid off.. ever.

This is one of the issues with education. Anytime education budgets get threatened, the admins in charge threaten cuts in teacher jobs and pay, never in administrator jobs or pay... this puts the Teachers' Unions up in arms, and usually makes the politicos back off.

That the TUs should be going after the administrators and their pay and perks, is somehow never brought up.

 
At 9/07/2012 10:43 PM, Blogger OBloodyHell said...

>>> Are you really getting noticeably less service?

Depends on what you mean by "service". It seems to me that the sexual aids being used to sodomize the American public are a little bit smaller...

 
At 9/07/2012 11:26 PM, Blogger Hydra said...

I do not understand the preoccupation with jobs as if work was a good thing. If we were smart we could probably get by with 25 percent of the workers we have now.

 
At 9/07/2012 11:32 PM, Blogger Hydra said...

Sounds like an opportunity for a single source of failure. I listen to various sources and coompare them to draw my own conclusions. I prefer not to let others do my thinking for me.

 
At 9/07/2012 11:33 PM, Blogger Hydra said...

Perverse.

 
At 9/07/2012 11:57 PM, Blogger Eric Wright said...

This comment has been removed by the author.

 
At 9/07/2012 11:58 PM, Blogger Eric Wright said...

Same chart, just with federal government employees only.
http://i48.tinypic.com/jfgpif.jpg

 
At 9/08/2012 2:19 AM, Blogger PeakTrader said...

Ron says: "Are you really getting noticeably less service?"

Are you really getting noticeably less service from the economy underproducing by $1 trillion a year or per capita real income over $5,000 a year lower than it should be?

Chart:

http://www.advisorperspectives.com/dshort/charts/indicators/GDP-per-capita-overview.html?Real-GDP-per-capita-since-1960-log.gif

 
At 9/08/2012 7:10 AM, Blogger Eric said...

How many govt. job losses represent employees that retired (and left the workforce), but whose jobs were not back filled? This is a typical way for many govt. entities to soften the impact of "cuts." Where would I even look for data on this?

 
At 9/08/2012 7:15 AM, Blogger Larry G said...

there is another angle to not hiring replacements for govt retirees and that his hiring contractors which do not show up as govt employees.

This is a common practice in DOD where the actual number of govt employees is not the true picture of number of actual paid employees.

OBM is the site most likely to provide info along these lines but it's tedious searching for it.

 
At 9/08/2012 7:52 AM, Blogger VangelV said...

So, losing 700,000 government jobs, along with the services, is good news, because over 20 million Americans are unemployed or underemployed and pay less in taxes.

Yes it is. When you have 700,000 people whose job is to stop others from being as productive as they can be losing those jobs is a good thing.

 
At 9/08/2012 7:57 AM, Blogger VangelV said...

Are you really getting noticeably less service from the economy underproducing by $1 trillion a year or per capita real income over $5,000 a year lower than it should be?

The economy is underproducing because the government spends too much and taxes too much. I know that some on this thread prefer the North Korean economic model but it is clear that the less central planners and related minions a country has the better off it is. Time to gut the public payrolls and remove the shackles from the private sector.

For the fascists out there let me make it clear that means competition, not protectionism and bailouts.

 
At 9/08/2012 12:32 PM, Blogger Ron H. said...

"Are you really getting noticeably less service from the economy underproducing by $1 trillion a year or per capita real income over $5,000 a year lower than it should be?"

Don't you mean $5k/yr lower than it theoretically could be based on extrapolating that previous line out on your chart as if the bubble had never burst?

It's pretty, but fairly meaningless.

 
At 9/08/2012 1:59 PM, Blogger Scott Drum said...

Since government jobs require taking resources away from the private sector, a decrease in government jobs can only be a bad thing if government can employ those resources more efficiently than the private sector. Certainly there is little historical evidence to support that contention.

Job count is a pretty strange measure on which to focus, anyway. The job count in the agriculture sector has dropped astronomically over the last century. Food production has grown. Would it be a good thing if we shifted resources away from current producers to, say, organic farms, which would be more labor intensive?

 
At 9/08/2012 5:02 PM, Blogger PeakTrader said...

VangelV, I doubt regulators and tax collectors lost their jobs.

It seems, you believe a higher level of unemployment is good, in this depression, because that would cause even more government job losses and services.

Ron, the trend in that chart, since 1960, represents the production capacity of the U.S. economy.

I don't believe the Fed that half the losses, since 2007, were structural and half cyclical.

I think, almost all the losses were cyclical, in part, because older Americans haven't saved enough for retirement, both from overspending and asset losses.

 
At 9/08/2012 5:21 PM, Blogger Ron H. said...

Peak


"It seems, you believe a higher level of unemployment is good, in this depression, because that would cause even more government job losses and services."

Fewer government jobs and services are always good things. If there's a demand for those services they will be provided by the private sector, so those unemployed government workers won't stay that way long.

Of course if they're incompetent or the services they used to provide are unneeded...

 
At 9/08/2012 6:14 PM, Blogger PeakTrader said...

Ron, so, a deeper depression is good, because it would get rid of more government workers?

 
At 9/08/2012 7:22 PM, Blogger aorod said...

Yet the economy is growing albeit slowly. Could it be that producing something is better than nothing?

 
At 9/08/2012 7:22 PM, Blogger aorod said...

Yet the economy is growing albeit slowly. Could it be that producing something is better than nothing?

 
At 9/08/2012 9:27 PM, Blogger VangelV said...

VangelV, I doubt regulators and tax collectors lost their jobs.

Possible true. Which is why the job losses do not go far enough.

It seems, you believe a higher level of unemployment is good, in this depression, because that would cause even more government job losses and services.

No. Employment is good. But not public sector employment.

Ron, the trend in that chart, since 1960, represents the production capacity of the U.S. economy.

The problem is that the entire period has included massive monetary expansion by the Fed.

I don't believe the Fed that half the losses, since 2007, were structural and half cyclical.

The Fed is probably as clueless as you are.

I think, almost all the losses were cyclical, in part, because older Americans haven't saved enough for retirement, both from overspending and asset losses.

Why would older Americans 'save' given the fact that the Fed has been lowering interest rates and robbing savers of purchasing power?

 
At 9/08/2012 9:27 PM, Blogger Ron H. said...

"Ron, so, a deeper depression is good, because it would get rid of more government workers?"

As I explained less government means lower government spending. Valuable workers would soon be reemployed in the private sector providing the services they had previously provided as government workers - if those services are really in demand. If not, we shouldn't be forced to pay for them now.

But I forgot. You believe that "aggregate demand" drives economic activity, and that it doesn't matter at all where that demand comes from.

A government worker digging holes and filling them back in creates as much demand as a worker producing consumer goods.

 
At 9/08/2012 11:36 PM, Blogger Hydra said...

Valuable workers would soon be reemployed in the private sector providing the services they had previously provided as government workers - if those services are really in demand. If not, we shouldn't be forced to pay for them now.

================================

Where this goes wrong falls on the single word, "now".

Consider a resource like Central park. Its value in the commercial wolrd is easily caclulated by summing up the value of an equivalent developed area in its vicinity.

Yet Central Park is arguably a priceless resource:It is the only one of its kind, anywhere around. What would be the cost for its thousands of "customers" if they had to travel hundreds (or thousands) of miles to the neaxt nearest facility of it type?

Probably, that cost would be more than the value of the park if it was commercially developed. (I could be wrong here, so jump in).

At the time (the then "now") that the park was created Ron;s argument would have been no doubt correct. At that time, there was not the demand that would have allowed the park to be a successful commecial enterprise.


Central Park is maintained by a slew of public workers, some of whom hire private contractors to help them.

Does Ron actually believe that if government was eliminated, private enterprise wuld come up with equivalent services at lower cost? That Private Enterprise would fulfill all those sevices now done by government?

I hope he is right, but I don't think so. I think it would be broken up and sold because thei pieces would be seen as more valuable than the whole.

"Now".


OK, Maybe Six Flags or Disney would take it over and operate it as an amusement park. Would the end result be the same or as valuable to as many people? In order to succeed, the answer would have to be that it would be more valuable, and six Flags or Diney would spend more operating it,and they would take more out in profits.

From whoever could afford a ticket.






 
At 9/08/2012 11:38 PM, Blogger Hydra said...

"No. Employment is good. But not public sector employment."

I am always suspicious of blanket statements.

 
At 9/09/2012 12:02 AM, Blogger PeakTrader said...

Ron, your theory is not supported by the facts.

VangelV, the Fed increased purchasing power through sustainable real income growth.

In a depression, you want people to spend, not save.

Anyway, capital gains on Treasury bonds increased, which benefit older Americans.

 
At 9/09/2012 12:55 AM, Blogger Ron H. said...

"Consider a resource like Central park. Its value in the commercial wolrd is easily caclulated by summing up the value of an equivalent developed area in its vicinity. "

Excellent choice of examples. Read this carefully and understand what you are reading. Please read it all.

A private organization saved Central Park from certain destruction when City government was unable to do so. A classic example of private enterprise doing a better job of providing services than government. John Stossel is a member and contributor.

 
At 9/09/2012 1:04 AM, Blogger Ron H. said...

"Does Ron actually believe that if government was eliminated, private enterprise wuld come up with equivalent services at lower cost? That Private Enterprise would fulfill all those sevices now done by government?"

Of course Ron does. He knows it to be true from countless examples like Central Park. Services would be provided based on actual demand for them, not what some central planner thinks demand for them is, so there might be a lot fewer of them provided.

People like you who are afraid to live their lives without being told what to do at every step can't seem to understand that concept.

 
At 9/09/2012 1:08 AM, Blogger Ron H. said...

"Ron, your theory is not supported by the facts."

Of course it is. There's evidence all around you. Do you really believe government spending is better than private spending?

 
At 9/09/2012 1:09 AM, Blogger PeakTrader said...

About 150,000 jobs are needed each month just to keep up with population growth.

The output and employment gaps haven't begun to close. It's an L-shaped "recovery" so far.

BLS
Employment Situation Summary
September 7, 2012

"Since the beginning of
this year, employment growth has averaged 139,000 per month, compared with an average
monthly gain of 153,000 in 2011."

 
At 9/09/2012 4:50 AM, Blogger Larry G said...

do you think that throwing a football to each other, or creating porn or drawing tattoos, entertainment is particularly more useful than what you perceive some govt workers doing?

the key is that there can and is demand for things that are not necessarily "useful" nor "efficient" but people want it, ergo a demand for it.

but people also need sewage treatment even if they don't "want" it, it needs to be done.

people who own shops, need police and fire protection even though 99% of the time those folks are not directly engaged in stopping crime or fires.

the streets would fill with trash if there were not folks who picked it up but where is the "demand" for that service?

Would the guy who pays for a prostitute willingly pay in the same way with the same gusto to have trash pickup up?

MOST PEOPLE, people who DO VOTE do want these things done and they do want everyone to share equally in paying for them with taxes.

If this is not your cup or tea and you do live in a country where we do vote to decide these issues then I'm not sure what you are really after other than bitching and complaining about a world where you are a distinct minority and probably always will be.

People do not like taxes, no question about it but people also do not like trash in the streets, unsafe streets and homes, and sewage polluting and threatening health.

the places where you see these things are usually 3rd world countries run by thugs instead of elected governance - that almost always agree to impose taxes for services.



 
At 9/09/2012 7:18 AM, Blogger sethstorm said...

The biggest loss of such jobs was solely due to ALEC-powered and selectively targeted envy. People were instructed to look at the government workers with envy while being told not to do the same with the private sector - the same private sector that was withholding, outsourcing, or diverting work for politically-charged reasons.

 
At 9/09/2012 8:02 AM, Blogger VangelV said...

Central Park is maintained by a slew of public workers, some of whom hire private contractors to help them.

I don't think that you understand that Central Park can be managed far more effectively by a private company.

 
At 9/09/2012 8:03 AM, Blogger VangelV said...

"No. Employment is good. But not public sector employment."

I am always suspicious of blanket statements.


Really? How about this one; stealing is not good.

 
At 9/09/2012 8:11 AM, Blogger VangelV said...

VangelV, the Fed increased purchasing power through sustainable real income growth.

It did not. The Fed robbed savers of purchasing power by printing more money to bail out reckless borrowers.

In a depression, you want people to spend, not save.

I want people to have the opportunity to repair their balance sheets and to let the market liquidate malinvestments. If you are in trouble because you spent more than you should have how is the solution spending even more?

Anyway, capital gains on Treasury bonds increased, which benefit older Americans.

Nonsense. Take a look at what the decline in interest rates has done to pension plans and you find that the increase in market value on the asset side of the balance sheet has been overwhelmed by the increase in liabilities. Older Americans need income to live on. Lower rates mean that they need to have saved far more than they actually did to finance the lifestyle that they thought they would have.

 
At 9/09/2012 8:16 AM, Blogger VangelV said...

About 150,000 jobs are needed each month just to keep up with population growth.

Yes they are. And those jobs would be created if we fired all the bureaucrats who are getting in the way. I note that Gorbachev did not try to regulate national toilet tank sizes or shower head pressures. There is too much government sucking up too many valuable resources and putting up too many barriers to the private sector.

 
At 9/09/2012 8:33 AM, Blogger VangelV said...

do you think that throwing a football to each other, or creating porn or drawing tattoos, entertainment is particularly more useful than what you perceive some govt workers doing?

The last time I looked I did not have to pay for private sector employees looking at porn on their PCs. But I do have to pay for public sector employees doing the same thing. The way to measure usefulness is simple. If I choose to pay for it the activity is useful. If I reject it, it isn't.

the key is that there can and is demand for things that are not necessarily "useful" nor "efficient" but people want it, ergo a demand for it.

You do not seem to understand understand what the term 'demand' and 'useful' mean. I suggest that you take some time off from posting and looking at a dictionary. Football and porn are 'useful' because there is a huge consumer market for them. End of story.

but people also need sewage treatment even if they don't "want" it, it needs to be done.

What kind of idiot thinks that people do not 'want' sewage treatment? They do want it. The debate is about who should provide it and at what cost.

people who own shops, need police and fire protection even though 99% of the time those folks are not directly engaged in stopping crime or fires.

They do get protection that mainly comes from private security guards because the 'police' are mostly overpaid bureaucrats who mainly appear after a crime has taken place to record some information. As for fire protection, the private sector can provide it at the same level for a third of the cost.

the streets would fill with trash if there were not folks who picked it up but where is the "demand" for that service?

No, they would not. They would be cleaned by private contractors who did not 'own' the jobs and had to do a decent job to keep the contract.

Would the guy who pays for a prostitute willingly pay in the same way with the same gusto to have trash pickup up?

He would pay if he wanted his trash picked up.

MOST PEOPLE, people who DO VOTE do want these things done and they do want everyone to share equally in paying for them with taxes.

"Most people" want to eat but that does not mean that there should be one government run restaurant operation. And "most people" do not WANT to pay an above market price dumdum. I think that "most people" would rather have their taxes cut by a third and let more accountable private contractors provide better services.

And if 'most people' want to build an opera house or hip-hop museum that does not give them the right to ask those that disagree to pay for them.

 
At 9/09/2012 8:36 AM, Blogger VangelV said...

If this is not your cup or tea and you do live in a country where we do vote to decide these issues then I'm not sure what you are really after other than bitching and complaining about a world where you are a distinct minority and probably always will be.

I don't know where you live but where I live nobody votes on who does the trash pickup and which company should provide the fire protection at what price.

When it comes to ordinary practical decisions the government does not have the consent of the governed and never asks the governed. Which is why it is not legitimate.

 
At 9/09/2012 8:38 AM, Blogger VangelV said...

The biggest loss of such jobs was solely due to ALEC-powered and selectively targeted envy. People were instructed to look at the government workers with envy while being told not to do the same with the private sector - the same private sector that was withholding, outsourcing, or diverting work for politically-charged reasons.

Not at all. The governments ran out of money and had a choice between layoffs or bankruptcy.

 
At 9/09/2012 8:40 AM, Blogger Larry G said...

in your world, the snow plow company is private and people who don't want to pay - don't.

it would be the same with police, fire, rescue, sewage, etc.

they'd live among the people who did pay - using the services and being parasites.

basically, each person has some number of things they would not pay for because they don't need them and don't want to pay proactively in case they might need the service.

People don't want to pay gas taxes nor tolls but they want the traffic lights to work and the roads plowed.

by the time you look at each anti-tax individual and then look at the anti-tax people as a group - we'd have no taxes and no services other than what private parties would offer so you'd have sewage and garbage running through the streets.

Your view and advocacy basically i show 3rd world countries operate.

A place like New York City would look like Port a Prince in your world.

 
At 9/09/2012 8:45 AM, Blogger PeakTrader said...

VangelV, you're still blaming monetary policy for adverse effects of fiscal policy and government laws.

The Fed doesn't micromanage the economy.


 
At 9/09/2012 9:01 AM, Blogger VangelV said...

in your world, the snow plow company is private and people who don't want to pay - don't.

Correct. They don't get their roads and driveways cleared unless they pay. Just like they don't get to buy milk unless they pay for that milk.

it would be the same with police, fire, rescue, sewage, etc.

You are catching on. If you want fire protection you have to pay for it like you do now. But you get more choice and lower prices. There is no monopoly that dictates what you can or cannot do.

they'd live among the people who did pay - using the services and being parasites.

Not at all. If you don't have fire insurance and your house caught fire you would have to pay the asking price on the spot or your house would burn down. The fire service is not free. Neither are the other services.

basically, each person has some number of things they would not pay for because they don't need them and don't want to pay proactively in case they might need the service.

Correct. I don't pay for the caviar that you like because I don't eat it. Not having to pay for something that I do not use is not harmful to me.

People don't want to pay gas taxes nor tolls but they want the traffic lights to work and the roads plowed.

If you do not want to pay tolls don't drive. The roads and traffic lights would be taken care of by their owners so that is not a problem either. Most city roads were not built by government but by private contractors. There is nothing wrong with those roads being owned and managed by local associations that collect fees for their upkeep. Most drivers would see their fuel costs cut by half. That saving would be more than enough to pay for the use of roads. The early interstates could be built by private trusts because there was demand for them. There is no reason to think that the same things cannot happen today.

by the time you look at each anti-tax individual and then look at the anti-tax people as a group - we'd have no taxes and no services other than what private parties would offer so you'd have sewage and garbage running through the streets.

This is not a problem because essential services like food production, housing, education, protection, health care, etc., can be provided at a lower cost by the private sector. Is North Korea or Cuba better off because food production is run by the government?

 
At 9/09/2012 9:02 AM, Blogger VangelV said...

Your view and advocacy basically i show 3rd world countries operate.

A place like New York City would look like Port a Prince in your world.


My world would look a lot more like Hong Kong than Port a Prince.

 
At 9/09/2012 9:09 AM, Blogger Larry G said...

public roads paid for by who?

on a voluntary basis?

how would you keep people who did not pay off the roads?

would you make all roads privately owned and have toll gates?

would you put cordon tolls on on cities so that in order to use city streets, you have to pay a daily toll?

re: Hong Kong

has a mandatory payroll tax and universal health care.

Port A Prince does not.

you say one thing but choose another.

 
At 9/09/2012 9:09 AM, Blogger VangelV said...

VangelV, you're still blaming monetary policy for adverse effects of fiscal policy and government laws.

The Fed doesn't micromanage the economy.


But it is the great enabler. When the Fed prints money it allows government to escape from having to make a choice. It transfers wealth to the government and the financial sector by robbing savers of purchasing power. The Fed's monopoly on the creation of money and credit needs to be taken away and the FRNs should have to compete with private money.

 
At 9/09/2012 9:35 AM, Blogger Larry G said...

You might want to consult this list of Central Banks for the world:

http://en.wikipedia.org/wiki/List_of_central_banks

 
At 9/09/2012 9:37 AM, Blogger Larry G said...

Countries without central banks

Andorra
Monaco

 
At 9/09/2012 9:57 AM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

While government job POSITIONS have been reduced (thank goodness), it does not mean those government employees are now unemployed. Most "missing" government employees are retired or left voluntarily, and their positions were not filled.

VERY few government employees have been "laid off."

 
At 9/09/2012 10:39 AM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

I'm curious -- how much of the reduction of public sector employee positions is the result of contracting out government services?

This privatization process has a two-fold effect on employment numbers -- both the reduction in government jobs and the increase in "private" jobs.

Such outsourcing WILL probably result in further net unemployment, as the private sector can usually do the job with less employees than a government agency -- and that's a GOOD thing, not a negative.

I'm all in favor of competitively contracting out every possible government function. I simply raise this issue as a factor to be considered when discussing public vs. private employment figures.

 
At 9/09/2012 10:51 AM, Blogger sethstorm said...


Not at all. The governments ran out of money and had a choice between layoffs or bankruptcy.


Where such situations were the creation of ALEC-backed people, namely those from Wisconsin and Ohio. Those debts were created by ALEC politicians for the sole purpose of shoving down unwanted (and freedom-reducing) laws.

Ohio wisely repudiated ALEC and has prospered, Wisconsin failed to repudiate ALEC and suffers economically. The stats on unemployment dont lie, but they prove something unpleasant for the fiscalists.

 
At 9/09/2012 10:54 AM, Blogger Larry G said...

When DOD positions are "outsourced", they generally save about 1/3 to 1/2 on costs primarily on office space, work hours, and benefits.

Contractors generally work as many hours a week as it takes to accomplish projects and do not get overtime. They usually do not have a desk or they share one and their only pension is what they contribute on their own into a 401K.

Many DOD contractor positions go to "double dippers" - 20-year retired military who often go to work for the govt agency that produced the equipment the military guy used when he was in the military.

For instance, a military guy that worked on a missile fire control system or a helicopter may retire and then go to work for the agency that developed and fielded that equipment.

they get their military pension, military health care and the contractor lets them take a good amount of compensation in tax-free contributions to an IRA or 401(k).

Other military -usually enlisted, will go to work as deputies, fireman or EMS , etc in local govt.

there's a reason why most police have haircuts that look like military guys.





 
At 9/09/2012 11:06 AM, Blogger sethstorm said...


I'm all in favor of competitively contracting out every possible government function. I simply raise this issue as a factor to be considered when discussing public vs. private employment figures.

That's what never should be done given that it ends up like defense contractors - except worse off for the workers.

If anything, a state should reintegrate what was once privatized in 2010 (or in the South, much earlier) and declare it unconstitutional to privatize services.

 
At 9/09/2012 11:06 AM, Blogger sethstorm said...


I'm all in favor of competitively contracting out every possible government function. I simply raise this issue as a factor to be considered when discussing public vs. private employment figures.

That's what never should be done given that it ends up like defense contractors - except worse off for the workers.

If anything, a state should reintegrate what was once privatized in 2010 (or in the South, much earlier) and declare it unconstitutional to privatize services.

 
At 9/09/2012 2:58 PM, Blogger juandos said...

"That's what never should be done given that it ends up like defense contractors - except worse off for the workers"...

Well setstorm not sure if that sentence makes much sense especially since the workers don't have to work at defense contract facilities...

 
At 9/09/2012 3:00 PM, Blogger juandos said...

"there's a reason why most police have haircuts that look like military guys"...

Easier maintainence larry g...

 
At 9/09/2012 3:16 PM, Blogger juandos said...

larry g still proving he doesn't understand the concept of "free market" says: "do you think that throwing a football to each other, or creating porn or drawing tattoos, entertainment is particularly more useful than what you perceive some govt workers doing?"...

Yes those activities are far more productive than government work if people are ready and willing to use their own money to purchase those goods and services...

 
At 9/09/2012 3:38 PM, Blogger Larry G said...

re: someone who voluntarily wants to buy a tattoo but will not voluntarily pay for sewer service so the govt has to "take" his money and that is "less efficient".

hmmmm.....

 
At 9/09/2012 4:25 PM, Blogger juandos said...

"re: someone who voluntarily wants to buy a tattoo but will not voluntarily pay for sewer service so the govt has to "take" his money and that is "less efficient""...

larry g you don't have any idea whether person who is willing to pay for a tatoo isn't also willing to pay a private enterprise for his sewage services...

As usual with your strawmen, epic fail...

 
At 9/09/2012 4:28 PM, Blogger Larry G said...

yeah we do know. we know folks will refuse to pay for services unless the govt puts the arm on them.

if you make it "voluntary", many will not pay and instead spend their money on tattoos and other junk.

we know this.

the libertarian types would not pay for roads, sewer, water, police, etc if it were made 'voluntary'.

we know this.

this is why we have taxes and you pay them or get into trouble.

 
At 9/09/2012 6:08 PM, Blogger Ron H. said...

"they'd live among the people who did pay - using the services and being parasites."

That's nonsense. Why would police or firemen respond to my call if I weren't a subscriber to their services?

I can imagine a fire company responding to ensure that my neighbors houses are safe and that no lives are lost, but beyond that my house would burn to the ground.

And the reason the fire company would do that is because they work for the insurance company that insures my neighbor's property. It's in their self interest to avoid losses.

 
At 9/09/2012 6:15 PM, Blogger Ron H. said...

"People don't want to pay gas taxes nor tolls but they want the traffic lights to work and the roads plowed."

Unlike you, most people understand that they must pay for what they get. The problem is forcing people to pay for things they don't want. Not everyone is a socialist who believes they can live at the expense of everyone else.

 
At 9/09/2012 6:19 PM, Blogger Ron H. said...

"and declare it unconstitutional to privatize services. "

Declare it? Doesn't that require an amendment? When did that change?

What did your mother say about the data plan?

 
At 9/09/2012 6:21 PM, Blogger Larry G said...

you mean if an unknown women was getting raped or customer in a shop, assaulted, the police would check first to see if they had paid their bills?

really? this is bizarre.

re: fire service and insurance countries

you mean the taxes collected from people for fire service is in addition to what they pay for fire insurance?

so you're admitting that the people who don't pay end up costing others more money to make up for the people that don't pay?

do you acknowledge that people who do not pay cost others more and that might be why they are "forced" ?

 
At 9/09/2012 6:23 PM, Blogger Larry G said...

" most people understand that they must pay for what they get"

nope.

a good number will not pay unless "coerced".

the property tax or water bill comes in the mail and they'll ignore it unless or until.. someone comes to turn off the water or evict them.

if you had the bill itemized, they'd pay for what they wanted and skip what they did not want.

 
At 9/09/2012 6:25 PM, Blogger Ron H. said...

"re: someone who voluntarily wants to buy a tattoo but will not voluntarily pay for sewer service so the govt has to "take" his money and that is "less efficient"."

Everyone wants sewer services, Larry, and is willing to pay for them. The alternatives are too unpleasant. You're not trying in your bumbling way to present a "free rider" argument, are you?

There's no particular reason for sewer service to be a government service in any case.

 
At 9/09/2012 6:27 PM, Blogger Larry G said...

" Everyone wants sewer services, Larry, and is willing to pay for them."

not true. People will refuse to pay - until they cut them off.

the point here is that a good number of people will NOT "voluntarily" pay.

they have to be coerced.

 
At 9/09/2012 6:33 PM, Blogger Ron H. said...

"if you make it "voluntary", many will not pay and instead spend their money on tattoos and other junk.we know this."

How do we know this, Larry? Try to stay on course and provide a meaningful answer. I can't wait to read this one, it's bound to be good.

"the libertarian types would not pay for roads, sewer, water, police, etc if it were made 'voluntary'.

we know this.
"

This answer is bound to be even better! Let's hear it. Why don't libertarians want water or roads or sewer or security?

By the way, "we know this." isn't usually a good enough argument. "we know this because..." is much better.

 
At 9/09/2012 6:40 PM, Blogger Larry G said...

" How do we know this, Larry?"

we know this from experience.

there are always a certain number who will not pay their bills even with sanctions.

If you took the sanctions away and made it "voluntary", even fewer would pay.

" Why don't libertarians want water or roads or sewer or security?"

because they only want to pay for what they want and not pay for what they don't want.

so they'd pay for a police force 1/10 the size of the actual or not pay for fire service because they thought it was too expensive and unionized ... etc...

we know this from experience.

there are always people who won't pay and they give all different kinds of reasons... and the only reason they end up paying is if the govt comes after them.

 
At 9/09/2012 7:13 PM, Blogger Ron H. said...

"you mean if an unknown women was getting raped or customer in a shop, assaulted, the police would check first to see if they had paid their bills?"

Three things:

(1)There's more to security than just the police.

(2)I would expect a shopkeeper to provide security for his customers. Much of it these days is private security, as government police are too far away. In any case, his police subscription would cover the police arriving to take the necessary reports after the fact, just as they do now.

(3) In a case of immediate danger to life or limb few people would stand by without doing anything at all. A policeman would most likely intervene and then sort out the financial responsibility later, just as is currently done with medical emergencies. An uninsured women who gets police help might expect to get billed for the service later, just like the person who gets medical treatment does.

(4)Somethimes you write the stupidest things!

 
At 9/09/2012 7:21 PM, Blogger Ron H. said...

"nope.

a good number will not pay unless "coerced".

the property tax or water bill comes in the mail and they'll ignore it unless or until.. someone comes to turn off the water or evict them.

if you had the bill itemized, they'd pay for what they wanted and skip what they did not want.
"

Well I guess you're done having any thing to say that even hints at meaningful. Bye Larry.

 
At 9/09/2012 7:30 PM, Blogger Larry G said...

so you bill them afterwards...

and they pay?

and if they refuse to pay?

 
At 9/09/2012 10:09 PM, Blogger VangelV said...

public roads paid for by who?

Private roads built by developers who want to sell their properties or private investors looking to meet a need.

on a voluntary basis?

Yep. Just like you buy food from a food store only if you wish to.

how would you keep people who did not pay off the roads?

In some cases you do not want to keep people off the roads. You want them to use those roads to buy what the businesses that are located beside those roads have to sell.

would you make all roads privately owned and have toll gates?

Not at all. As I said, roads bring customers to businesses. Not only would you want to give customers free access you may want to figure out a way to get more of them to come to the area. And given the fact that local neighbourhoods need roads to get to and from places it makes sense that they would want their roads to connect to roads in other neighbourhoods and to provide easements.

would you put cordon tolls on on cities so that in order to use city streets, you have to pay a daily toll?

On some roads, absolutely. But not on others. I would let the market work. And haven't we had this discussion before? I recall providing you with references about how this works and the history of road building in the US.

The Voluntary City: Choice, Community, and Civil Society

Privatization of Roads and Highways

re: Hong Kong

has a mandatory payroll tax and universal health care.

Port A Prince does not.

you say one thing but choose another.


Honk Kong is not perfect but it is far from a kleptocracy like Haiti. Its tax rate is 15%, which may be too high but a lot better than any place that I would like to live in. And if you have ever been to HK you would know that only the most basic of healthcare is available from the public sector. If you are not in critical condition you wait for hours and you do not get to choose what doctor to use. The disincentives are in place to make it expensive for people to try to get free care. That is why most people choose to buy their own insurance and have many more options available to them. HK has certainly rejected the socialized medicine approach taken by Canada or the UK because such a system does not work.

 
At 9/09/2012 10:20 PM, Blogger VangelV said...

you mean if an unknown women was getting raped or customer in a shop, assaulted, the police would check first to see if they had paid their bills?

really? this is bizarre.

re: fire service and insurance countries

you mean the taxes collected from people for fire service is in addition to what they pay for fire insurance?

so you're admitting that the people who don't pay end up costing others more money to make up for the people that don't pay?

do you acknowledge that people who do not pay cost others more and that might be why they are "forced" ?


Have you had yourself tested? I am beginning just how stupid you really are. Not only are you ignorant you don't even know that you are ignorant. Which is why you construct straw man arguments time after time. Had you bothered to learn you would write far more than you do.

 
At 9/09/2012 10:22 PM, Blogger VangelV said...

(4)Somethimes you write the stupidest things!

Sometimes? When has he written anything that was not stupid?

 
At 9/09/2012 11:34 PM, Blogger juandos said...

"if you make it "voluntary", many will not pay and instead spend their money on tattoos and other junk.

we know this
"...

You got a mouse in your pocket larry g?

Who's this 'we' you're alluding to? One of your fellow socialists?

"the libertarian types would not pay for roads, sewer, water, police, etc if it were made 'voluntary'.

we know this.

this is why we have taxes and you pay them or get into trouble
"....

Well Sieg Heil! to you larry g...

Long live you and the mouse in your pocket...

 
At 9/10/2012 3:15 AM, Blogger Ron H. said...

V: "Sometimes? When has he written anything that was not stupid?"

Well, it a tough call, but on occasion I try to consider his comments ignorant and ill-informed.

That particular one didn't rise to that level.

 
At 9/10/2012 5:44 AM, Blogger Larry G said...

re: stupid

is claiming one is a "sovereign" and are suffering "injustice" at the hands of others in a country with elected governance and essentially advocating a 3rd world style economy.

you guys desperately need your own country cause you're never going to be happy in this one and the rest of us have to put up with your nattering and carping.

In any country with an elected governance, you boys LOSE.

your only other alternative as far as I can see is a country that does not have elective governance and the guy in charge is a Libertarian.

Essentially Libertarianism is incompatible with elected governance, right?



 
At 9/10/2012 6:28 AM, Blogger VangelV said...

is claiming one is a "sovereign" and are suffering "injustice" at the hands of others in a country with elected governance and essentially advocating a 3rd world style economy.

Your ignorance is showing again. You are advocating slavery because you prefer the rule and mercy of thugs to a voluntary society. The basis for your position is fear of taking personal responsibility for yourself. Well, some people are not afraid of taking responsibility for themselves and have no interest in being ruled by thugs.

 
At 9/10/2012 6:37 AM, Blogger Larry G said...

re: " You are advocating slavery "

I'm advocating Constitutional Governance.

You, on the other hand object to governance of any kind because it impinges on your "sovereign" status.

When this country was created, it was created explicitly to be governed and to have a government that was elected.

That means that people will be subject to elected governance.

there are few other options. You can have one guy in charge or you can advocate for what is essentially anarchy - i.e. what we called failed countries.

I think you boys are simply screwed up. You talk logic but ignore realities.

there is no country on earth that operates according to your ideals and the ones that come closest to our ideas are either 3rd world or failed.

 
At 9/10/2012 6:50 AM, Blogger sethstorm said...



(2)I would expect a shopkeeper to provide security for his customers. Much of it these days is private security, as government police are too far away. In any case, his police subscription would cover the police arriving to take the necessary reports after the fact, just as they do now.

Private "security" is just the few being protected from the many. This can be evidenced by the gated community and the degree to which it isolates itself from the regular population.

Private "security" abides by a very corrupt form of the Napoleonic Code. Either you're guilty or you're guilty unless you have favorable status that is not determined by legal standards.




On some roads, absolutely. But not on others. I would let the market work. And haven't we had this discussion before? I recall providing you with references about how this works and the history of road building in the US.

The problem is that you would end up cordoning off people roughly based on income and creating deeper division amongst the population.

Given that, privatizing roads leads to more peril for more people.

Juandos:
Defense contractors generally treat their workers with a level of respect not known to any other form of contingency work. In addition, job security is higher given that the temporary nature is offset by the near-certain ability to find a like-for-like replacement.

On the other hand, staffing agencies elsewhere do everything to defend against the person performing the work.

 
At 9/10/2012 12:06 PM, Blogger VangelV said...

I'm advocating Constitutional Governance.

When that governance imposes restrictions on people who are not violating anyone's rights and regulate voluntary behaviour that is slavery. As I pointed out, not even Mao tried to tell his people how much water their toilet tanks should hold or regulate the flow rates in their showers.

You, on the other hand object to governance of any kind because it impinges on your "sovereign" status.

Ron argues for a voluntary society. It is a concept that you seem to be ignorant of.

When this country was created, it was created explicitly to be governed and to have a government that was elected.

When the country was created it was governed by the Articles of Confederation. The Constitution was a coup of the elites not long after the British signed the treaties.

That means that people will be subject to elected governance.

Legitimate government requires the consent of the governed. Without his consent the government has no legitimate power over Ron.

"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.

That to secure these rights, Governments are instituted among Men, deriving their just powers from the CONSENT OF THE GOVERNED, ..."
(Emphasis mine.)

 
At 9/10/2012 12:13 PM, Blogger morganovich said...

larry-

this is your typically uninformed rant.

as ever, you are completely wrong.

libertarian views are completely compatible with elected government.

they, like our constitution (though preferably not as malleable), just give the inalienable rights derived from being human precedence over democracy. that is what inalienable means. that is why they are described as "natural" rights that derive from personhood, not from governmental fiat.

such rights are not subject to democracy. we cannot vote to make you shut up. that's what a right to speech means.

but a right cannot require that others perform positive actions for you. you cannot have a right that you cannot have alone on a desert island. there is not right to healthcare. such a right requires that the rights of others (to free association, their time, and their wealth) be violated to provide you with such an imagined right. thus, it is not right at all.

you never seem able to grasp this distinction.

you will now doubtless begin tossing out logical fallacies like appeal to practice and authority as it seems to be your primary mode of argument and you feel that "logic" is to constraining to your "reality" but this is precisely why you will never grasp this issue in any meaningful way.

you will leap from straw man to straw man and fallacy to fallacy all to prop up a "reality" that you cannot justify from any sort of first principles.

the us used to operate quite close to the ideals being discussed and rose to be the most prominent nation on earth by so doing.


you continually equate failed states and non government with libertarian idea as if haiti or zambia is somehow is a good protector of rights and property.

i have no idea why i am bothering to try and explain this to you again, as you seem to forget it anew on each thread, but you do not seem to even understand the terms you are trying to use. libertarian government is not lawlessness. it's rights based constitutional governance that constrains the role of democracy and government. constraint is not he same as absence.

why keep spouting these same willful distortions and bad illogical based arguments?

note:

"
there is no country on earth that operates according to your ideals and the ones that come closest to our ideas are either 3rd world or failed."

this is both factually inaccurate AND a logical fallacy (appeal to practice) rolled into one.

seriously, are you not capable of learning that that is a logical fallacy and why?

"no man has ever flown"

"every great power has a king"

"no great power has emancipated slaves"

"no country has ever set up a constitution based on rights"

"no nation has even been ruled by universal democracy"

etc etc.

every one of those was at one time true.

try remembering that and perhaps you will be able to stop comitting the exact same fallacy over and over. it's not event just the same fallacy, it's literally the EXACT SAME FALLACIOUS ARGUMENT.

is it that you cannot learn this or just that you are unwilling to?

this is not a deflatable issue lar. it's a clear and provable logical fallacy. it's also your primary argument, over and over.

we really need to start teaching logic as a part of school curricula.

 
At 9/10/2012 12:17 PM, Blogger VangelV said...

Private "security" is just the few being protected from the many. This can be evidenced by the gated community and the degree to which it isolates itself from the regular population.

I would argue that private security is when the few pay for their own protection. They are not protected from the 'many' but from criminals.

Private "security" abides by a very corrupt form of the Napoleonic Code. Either you're guilty or you're guilty unless you have favorable status that is not determined by legal standards.

Stupidity alert. Private security is far more likely to protect your rights than the police because those that pay for it do not want their guests to be hassled.

The problem is that you would end up cordoning off people roughly based on income and creating deeper division amongst the population.

No. There would be more access and safer roads. For businesses there is no incentive to cordon off their customers. History shows exactly how the process works. Sadly you choose ignorance over illumination.

Given that, privatizing roads leads to more peril for more people.

There is no evidence of this. The private highway in my area is much safer and better maintained than the paid highway.

 
At 9/10/2012 12:19 PM, Blogger Larry G said...

" Ron argues for a voluntary society. It is a concept that you seem to be ignorant of."

It's a concept that exists where in the world?

it's not a viable concept.

You can live in a country where you have elections and majority rules or you can live in a country with one ruler.

show me other options.

 
At 9/10/2012 12:27 PM, Blogger Larry G said...

re: " libertarian views are completely compatible with elected government"

no they are not - at least not the ones espoused here in CD.

where in the world does this happen?

it's NOT a logical fallacy guy to ask for examples of what you advocate.

what you advocate is something that has demonstrated that it is not feasible.

you can blather on all you want but once you start arguing for something that does not exist and pretend that the reasons that it does not exist are not real - then you're off onto your own worldview.

You can insult me all you want - but I do represent the majority of people's attitudes towards libertarian views.

Ron Paul and his supporters do exist but they cannot even influence the GOP platform agenda in any meaningful way and as a party, they are lucky to pull about 10% of the vote.

so you'd be wrong once again Morg.

It IS a debatable issue but in an elected governance, Libertarianism is rejected - over and over.

there is not a country in the world that is operated on Libertarian principles except for 3rd world and failed government type countries.

 
At 9/10/2012 12:46 PM, Blogger morganovich said...

larry-

you will clearly never understand logical fallacy. three seems to be some part of your brain missing.

let's take an example.

"no successful nation has repudiated the divine right of kings"

there was a time when some ancestor of yours could have made this exact argument and said "give me an example of one that has" as though that proves anyhting.

would you agree that the fact that it had not been tried did not mean it would not succeed?

if so, then why do you make the exact same argument over and over?

that is literally the PRECISE argument you are making.

further, our own nation provides a good example. we were not far off these libertarian ideals at our founding (perhaps not inclusive enough etc) but the primacy of rights over congress and the executive were well established.

under such ideals, we grew to be the most powerful and wealthiest nation in history. from this, you want to try to claim such ideal lead to 3rd world penury?

that's absurd.

you act as though doing something we have already done successfully in the past is somehow impossible and implausible.

you arguments are based entirely on willful distortion, illogic, and untruths.

and there you go again.

you claim to "be in the majority" as though that proves anyhting. it doesn't. you are now using a logical fallacy to try to defend that last fallacy and your inability to grasp what libertarian means.

"the majority agree that the sun revolves around the earth" was once true too. did that make it right?

i give up larry. to be able to convince someone of a logical argument, the listen must be capable of thinking logically. this is clearly not true of you. i'm not sure i have ever met anyone more immune to logic.

i'm sure you will have some response to this, but i am not going to read it as we have been around and around this tree 100 times, and the result is always the same.

why i expected this time to be different is a mystery to me. there really is no point to these discussions. my bad for engaging with you again.

 
At 9/10/2012 12:55 PM, Blogger Larry G said...

" why i expected this time to be different is a mystery to me."

me too!

:-)

 
At 9/10/2012 1:10 PM, Blogger VangelV said...


libertarian views are completely compatible with elected government.

they, like our constitution (though preferably not as malleable), just give the inalienable rights derived from being human precedence over democracy. that is what inalienable means. that is why they are described as "natural" rights that derive from personhood, not from governmental fiat.


But that is the problem. The 'elected' government cannot violate natural rights. That means that there is nothing for it to do because all services are better provided in a voluntary society by private interests than by government monopolies.

 
At 9/10/2012 1:13 PM, Blogger VangelV said...

It's a concept that exists where in the world?

it's not a viable concept.


Neither is a human society where there is no murder or theft. It does not mean that we cheer on murderers and thieves. As I pointed out before, the proper view of government is that of a gang of thieves. It does not matter which faction of the gang is in charge because the governed always suffer. Name me one society in which some political elite is not in charge and does not call the shots no matter how unpopular it may be. In your own country Congress has less than 20% approval yet it still writes all the regulations that rule your life. If you look around you find that the best government is that which governs least and where people are left alone to live their lives without the iron fist of a party or some petty dictator.

 
At 9/10/2012 1:15 PM, Blogger VangelV said...

re: " libertarian views are completely compatible with elected government"

no they are not - at least not the ones espoused here in CD.


I agree. No elected government is legitimate because it does not have the consent of all the governed. At best it has the consent of some majority but even that is in doubt because most people never get to vote for the specific policies that govern their lives.

 
At 9/10/2012 1:43 PM, Blogger morganovich said...

v-

"But that is the problem. The 'elected' government cannot violate natural rights. That means that there is nothing for it to do because all services are better provided in a voluntary society by private interests than by government monopolies."

it has plenty to do. it exists to protect rights, adjudicate when rights conflict, enforce contracts, protect the borders etc.

i think that's plenty for them.

best of all, a government with such limited powers would attract for more principled politicians, not the graft driven kleptocrats we seem to be plagued with.

why is not letting the elected government do much a problem? that sounds like a feature, not a bug. we managed to keep federal spending under 2% of gdp for 150 years (apart from a few wars). the us rose to global ascendancy while so doing. it's clear the current crop of knaves cannot be trusted anywhere near the public's money. this has been true from hoover on.

i'd love of them to be bored in dc. hell, i will personally send a ping pong table to congress if they agree to use it instead of passing laws.

 
At 9/10/2012 1:56 PM, Blogger VangelV said...

it has plenty to do. it exists to protect rights, adjudicate when rights conflict, enforce contracts, protect the borders etc.

How does it do the functions above without taxation at the point of a gun? In a voluntary society most people would choose the most effective services and the government cannot survive the competition. We certainly do not need to have a monopoly to provide law and order or defence. Even in our system most contract rights disputes are resolved by private arbitration because the inefficient government courts are too slow or have no jurisdiction across borders.

What you wrote would be true only if the support of government functions were voluntary and people paid for the things that they wanted done without governments creating monopolies. I am sorry but I do not see that anywhere.

 
At 9/10/2012 2:23 PM, Blogger morganovich said...

v-

"We certainly do not need to have a monopoly to provide law and order or defence"

yes, we do. it's about the only legitimate role of government.

it simply cannot be done privately without destroying the function of a society.

suddenly, you need to know what legal system every scrap of land you ever step onto subscribes to? that seems impossibly unwieldy and deeply uncertain and limiting.

so, i steal from you and retreat to my private property. who can come and get me if i do not subscribe to your legal system? suddenly every neighborhood could work like a foreign country.

will you hire a thief taker? what happens when i legally shoot him for trespassing as he had no right to come on my land.

what do we do when our legal systems disagree about who owns what or what a contract means? law works like an optimal currency area. you need a big enough scale to make it worthwhile.

defense is even more fraught. in an age of modern weapons, just how do you propose to defend the borders? who pays and equips the military? how do you deal with free riders?

we've had this anarcho-capitalist discussion many times, but i have never heard a good response to these issues.

all government is to some degree an evil, but up until we hit the libertarian ideals of protecting rights and enforcing contracts, it is the lesser of evils.

the system you describe of pure voluntary anarcho capitalist association is simply to unwield, inconsistent, and impractical to ever work on any sort of scale.

it does not address the basic needs for consistency that a society needs to be able to live in liberty (as opposed to pure freedom). it's just the way of all against all masquerading as viable governance.

 
At 9/10/2012 3:39 PM, Blogger Ron H. said...

"Private "security" abides by a very corrupt form of the Napoleonic Code. Either you're guilty or you're guilty unless you have favorable status that is not determined by legal standards."

Seth - what did your mother say about your data usage?

 
At 9/10/2012 3:51 PM, Blogger Ron H. said...

moganovich

"we really need to start teaching logic as a part of school curricula."

Agree 100% - but wouldn't that make it difficult to teach some of the other things kids are taught in school?

 
At 9/10/2012 4:07 PM, Blogger Ron H. said...

morganovich

"defense is even more fraught. in an age of modern weapons, just how do you propose to defend the borders? who pays and equips the military? how do you deal with free riders?"

I'm not sure free riders should be a concern, after all, since national defense is a federal function, and 40% of the people pay no federal income taxes, there are already almost as many free riders as paying customers.

 
At 9/10/2012 4:26 PM, Blogger Ron H. said...

morganovich

"we've had this anarcho-capitalist discussion many times, but i have never heard a good response to these issues."

You might find this interesting if you haven't read it. Very thought provoking.

And, it's FREEE!

 
At 9/10/2012 4:46 PM, Blogger VangelV said...

yes, we do. it's about the only legitimate role of government.

Really? Is it legitimate for government to break into a person's home without a proper warrant and shoot his dog? Or kill his son because he was defending the household? How is it legitimate when government decides to take property from one private individual so that another one could build a shopping mall on it? Or to arrest and imprison people who smoke pot or drink alcohol on Sunday?

With all due respect, I think that you do not understand the meaning of the word legitimate or what libertarians mean by the principle of non-aggression.

it simply cannot be done privately without destroying the function of a society.

I do not see how you can make this argument. Let the 'government' create its own courts and police forces and those that want to use them pay for them. Let others purchase their security services from private providers if they wish to and let competition take place.

suddenly, you need to know what legal system every scrap of land you ever step onto subscribes to? that seems impossibly unwieldy and deeply uncertain and limiting.

Ever hear of Common Law? Or Custom's Law? They have worked very well without government.

so, i steal from you and retreat to my private property. who can come and get me if i do not subscribe to your legal system? suddenly every neighborhood could work like a foreign country.

If you want to live in a voluntary society you have to obey the rules that respect your natural rights. Theft is against the law. You will be visited by my insurance agents and asked to give my property back to me. You will also be asked to indemnify them for their costs and pay any additional damages.

You really need to read up a bit more on the subject. Here are just a few sources that might be useful.

The Machinery of Freedom

The Ethics of Liberty

Anarchy and the Law: The Political Economy of Choice

The Enterprise of Law: Justice Without the State

 
At 9/10/2012 5:44 PM, Blogger Ron H. said...

"all government is to some degree an evil, but up until we hit the libertarian ideals of protecting rights and enforcing contracts, it is the lesser of evils."

And if government could be kept to those limits, there would be few complaints, but it doesn't seem that human nature allows for such a limit.

Once you give up some tiny amount of liberty by giving power to someone else, it seems that a crack has been opened that will inevitably grow wider, as has happened in the US since the founding, despite the best efforts of the Founders to limit government.

Human nature dictates that those with power over others will seek to increase that power, and it's seldom clear that's what's happening, but here we are.

 
At 9/10/2012 6:21 PM, Blogger juandos said...

"Agree 100% - but wouldn't that make it difficult to teach some of the other things kids are taught in school?"...

Yeah ron h, teaching logic would preclude any chance of teaching 'social justice cources or politically correct history'...:-)

 
At 9/10/2012 7:27 PM, Blogger Ron H. said...

"Yeah ron h, teaching logic would preclude any chance of teaching 'social justice cources or politically correct history'...:-)"

Very little other that math and science would pass the sniff test.

And of course recess.

 
At 9/10/2012 8:47 PM, Blogger VangelV said...

I'm not sure free riders should be a concern, after all, since national defense is a federal function, and 40% of the people pay no federal income taxes, there are already almost as many free riders as paying customers.

Shhh!!! Make believe libertarians don't like to hear that inconvenient fact.

 
At 9/10/2012 10:51 PM, Blogger Tamerlane said...

I would love to see the breakdown between Federal and State government jobs.

 
At 9/12/2012 1:03 PM, Blogger juandos said...

"Very little other that math and science would pass the sniff test"...

Even English grammar ron h?

 
At 9/13/2012 3:48 AM, Blogger Ron H. said...

juandos

"Even English grammar ron h?"

"Well, I tole that thar book larnin lady, 'the only letters I need are U S and A'."

 

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