Still think gov’t spending is beneficial? That’s $535 million for 1,100 jobs (worthwhile “investment”?)…jobs that are no more…and $535 of our taxpayer dollars gone.

Article in total here (MSNBC): http://bottomline.msnbc.msn.com/_news/2011/09/14/7759207-white-house-ignored-red-flags-in-loan-to-failed-solar-company?GT1=43001

This statement (and the whole philosophy of the post, in fact) should have a qualifier. Some economists agree. Certainly not all.

There’s a reason the IMF (amongst other organizations) recommend austerity. It isn’t because the government should act like a family; it’s because supply, demand, incentives, scarcity, and all the basic tenets of economic theory lead those organzations to conclude that government spending and defecits are unsustainable.

To dismiss several branches of economics–on such a fraught topic–really only shows half the picture.

Follow this train of thought through. Would they spend the money on other things. Of course they would.

So then the question is, why are we paying them for things they don’t want?

There is huge scope for saving money.

“Or you could give the money to the people for those services. They can then buy and spend as they see fit. After all, what they need isn’t necessarily want you want to give them.”

The paragraph quoted, however, I think is just nonsense – you start with a conclusion, continue with a rationale, and end with your premise. By doing so, you’ve succumbed to a failure in logic.

Yes, socialism is crude and inefficient, and market forces are better. Yes, peoples needs vary. However, the people who wind up using these services frequently are unable to prioritize their needs over their wants in the first place! These people aren’t “rational actors” – most people aren’t.

Do you really think that if you gave people an allowance that they would fail to spend it on ephemeral pleasures? To put it a slightly different way, how many food stamps have you seen spent on vegetables (potato chips don’t count)?

There is no social contract that says we should give up our wealth as part of our society. That is utter nonsense. Check the Constitution – nothing even remotely like that. Our government was established to provide freedom, which means personal AND economic freedom. If you are a construction worker, then you are making a choice on your economic status. Deal with it. If you don’t like it, then work an extra job, invest wisely, live below your means, or get into a new field. Don’t expect others to pay your way.

History is littered with failed socialist experiments. We are headed that way along with most of Europe. As bad as our financial issues are today, we have only scratched the surface considering the unfunded liabilities our nation faces.

Since the only source of income for government is the taxpayers, every “tax cut” is really just deferred taxes. You personally may not have to pay later, but someone will.

For the same reason, every tax break one person or company gets has to be paid for with more taxes on someone else. That doesn’t change, no matter how much you cut government spending.

To the extent 401(K) and IRA’s are subject to taxation, they represent government savings. If your tax rate when you withdraw it is 25%, then 25% of your savings are really savings by government.

The earning on those savings belong to the government too, but it isn’t counted as revenue until it is collected in taxes. Which is why the whole family budget analogy is not very good when applied to the federal budget.

If only our government would spend money on (or reserve their taxes discounts for) opportunities that will create jobs and support a culture that respects it’s citizens! Small businesses are the job and cash flow engines of our country.

I really appreciate the occasional look at my financial life’s background of the national finances and politics.

I come to this blog for clear friendly articles that are encouraging and thoughtful. This one fits the bill completely. Please continue to discuss logical fallacies that creep into our economic discourse.

Look at the graph. BBC (Pravda) so it has to be true.

Spending on the NHS has nearly doubled.

Has your efficiency increased 100%? Nope.

Is it as is claimed an investment? Well if so, the investment has to start paying. Either by producing more money – which the NHS can’t do, or because people are healthier, so they don’t need all the spending.

So what is it? Has the investment failed? Has your productivity failed?

What about the 20,000 killed each year?

I’ve had personal experience of 4 cases where the NHS screwed up so bad people were killed.

1. Surgeon didn’t take a swab when he found an infection. 2 weeks later he removed bladder, uterus, vagina, 1 kidney and most of the bowel. He then upped the morphine dose to kill off the patient. Partners mother. The GPs also made errors and an entire practice had to resign from the NHS.

2. Similar case with a family friend. Toxic shock.

3. Another friend where during an operation they intubated him, not into the airway but the stomach. They didn’t monitor oxygen levels or notice he had turned blue. Brain dead – died two days latter.

4. A case current in the courts about another friend. Missed a brain anurism. Died 10 days after giving birth leaving the father with two kids. Since she was a very high earner as a partner in a hedge fund, the bill there is going to take a massive chunk.

No doubt you will think that is wrong. The NHS after all takes the attitude that the victims should suffer in silence.

4 personal examples, and I’m sure there are more.

Local to me there was one hospital, St Mary’s in Sidcup that starved a patient to death.

We’ve hospitals killing hundreds from infections, and no one is prosecuted.

We had Shipman, a Doctor kill over 600 (the unofficial figure, the official figure over 200), and the NHS didn’t notice.

Reaganomics architect David Stockman has said so. Former Reagan senior staffer and Ron Paul economic adviser Bruce Bartlett has said so. Alan Greenspan has said so. And you know what? All of these men, along with the S&P ratings agency, have called for the end to the Bush tax cuts. I think it is paramount to note that NONE of these men are politicians. None of these men make their money off of partisan punditry. But all of these men are fiscal conservatives. Are they lying to us?
http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/
http://economix.blogs.nytimes.com/2011/07/26/are-the-bush-tax-cuts-the-root-of-our-fiscal-problem/
http://money.cnn.com/2010/08/09/news/economy/elders_economy/index.htm
http://www.frumforum.com/ratings-agencies-also-want-to-see-bush-tax-cuts-lapse

And if their words and experience don’t carry enough weight, let us not forget that Ronald Reagan raised taxes 11 times:
http://www.forbes.com/2010/02/02/barack-obama-ronald-reagan-budget-taxes-opinions-contributors-rob-shapiro.html
http://money.cnn.com/2010/09/08/news/economy/reagan_years_taxes/index.htm

some more facts for your consideration:
history of top marginal tax rates in the US (the threshold for paying the top rate is higher than it’s been since 1964, and the rates themselves are lower than they’ve been since ’91 — when GHW Bush was forced to raise taxes to fix the budget):
http://ntu.org/tax-basics/history-of-federal-individual-1.html

U.S. rates vs rest of world (US came in at number 37):
http://www.nationmaster.com/graph/tax_hig_mar_tax_rat_ind_rat-highest-marginal-tax-rate-individual

the avg multi-millionaire/ billionaire pays approx 17% in income taxes vs the avg middle class earner who pays between 25% and 33%:
http://www.frumforum.com/how-the-super-rich-scored-on-tax-day

“Warren Buffet On Why U.S. Taxes Are Too Low For The Wealthy”
http://www.youtube.com/watch?v=iVOwaMWewGY

many corporations exploit a variety of loopholes that allow them to pay an effective rate of 0%; and some even “pay” a NEGATIVE rate, allowing them to MAKE MONEY off of refunds on top of their net profits using your tax dollars:
http://accounting-financial-tax.com/2011/06/12-big-yet-famous-corporations-pay-no-tax/

“The truth of the matter is that federal taxes in the United States are very low. There is no reason to believe that reducing them further will do anything to raise growth or reduce unemployment.” – Bruce Bartlett
http://economix.blogs.nytimes.com/2011/05/31/are-taxes-in-the-u-s-high-or-low/

*Bruce Bartlett has spent many years in service on the staffs of Representatives RON PAUL and Jack Kemp and Senator Roger Jepsen. He has been executive director of the Joint Economic Committee of Congress, senior policy analyst in the Reagan White House, and deputy assistant secretary for economic policy at the Treasury Department during the George H.W. Bush administration.

“NOT COMING TO THIS SITE ANYMORE”
A number of readers have expressed this sentiment. If all it took was one post that disagrees with your personal ideologies to turn you away from years of well written personal finance content, then this site is probably better off for not having you. JD showed some guts to run it. J.D. won’t say it, and I don’t want to put words in his mouth, but there are plenty of washed out, opinion-less, gutless media outlets and blogs out there, if that’s the type of information you seek. Why can’t someone publish an opinion that disagrees with yours one time without you threatening to run away? Lest I remind you, that the content published here is 100% free and this is a BLOG.

That being said, J.D. lets be honest, you wouldn’t have run this post if you were a tea-bagger, so there’s no need to hide behind the apolitical shield. Be proud of what you believe in, brother.

MY OWN TAKE
I offer a bit of a mixed view. I think we should cut taxes on businesses and low/middle income families. If you want to simultaneously stimulate the economy and job growth while providing a social net for those in tough predicaments so there isn’t civil unrest and mayhem, the solution is simple (although it would never pass b/c most political ad dollars come from the rich):
1. Stop taxing any families that make less than $150K completely.
2. Increase marginal taxes on those making over $250K SUBSTANTIALLY.
3. Cut the business tax, particularly on smaller businesses so they hire more people.
4. People keep their own social security contributions, but this is invested conservatively to outpace inflation by professional govt. investors (as most of society has no clue on how to run investments).
5. Universal Healthcare – citizens benefit, businesses benefit, and it lowers medical cost inflation (that the govt. ends up paying for anyways). Call it social healthcare, I don’t care. It’s the only solution that makes sense anymore. Everyone outside of insurance companies wins.

Low and middle class families are struggling to pay bills, and by lowering their taxes, you stimulate spending which also stimulates job growth. You also give them the ability to save additional funds so that they can create their own safety-net vs. relying on handouts. And with no income tax, suddenly handouts seem much less appealing anyways. You keep what you make and you work harder. Less need for social handouts equal less need for taxes.

Those making over $250K should have to pay substantially more on that MARGINAL income only. Anyone should be able to live extremely comfortably at that income level (first $150K is tax free) and most marginal gains above that are typically just hoarded away and don’t provide any benefit to society or even the individual. And I hate to break it to the rich, but let’s not forget that without a middle class driving the economy, you would no longer be rich.

No, it didn’t. Workers in my office are on NHS pay band 2 (http://www.nhscareers.nhs.uk/details/Default.aspx?Id=766) which is barely a living wage in my part out of the country. Our office used to have 8 members of full time staff- now it has 1 full time staff member and 4 who are on hours ranging between 16 and 30 a week. I am a temporary worker they have drafted in 2 years in a row to work full time over the summer. And before you ask, no, I am not making a lot of money. I am making £7 an hour, working a demanding, stressful and disheartening job, so over the course of summer (6 weeks), after taxes, I make £1340.

Of course, as buses to the hospital don’t run from my part of town, I had to buy a bicycle and with all other expenses I had to pay to work there that brought my net wage to only £1100 which is barely 2 months rent while I’m at university in the capital because, guess what, there’s no affordable housing in London.

Yes, the NHS has a lot of problems. Millions of pounds were wasted on a countrywide computer system (IPM) that doesn’t do what it was intended to do and constantly breaks down. The infrastructure is crumbling and decayed- our hospital was built very shoddily in the 60s as a temporary stop gap and has never been updated.
You are right in part about a lack of productivity. The workers in the NHS are not well paid (apart from those higher up, who are making a disproportionately large amount), but they do have a lot of benefits in term of holiday and sick pay, flexible hours and job security. Some of the things the workers in my office get away with are beyond belief- they are disturbingly unprofessional on occasion.

But one case, however terrifying, does not make a “death panel”. The NHS does deliver quality care, and there is a lower rate of maternal death in the UK than there is the USA. I would much rather have our model of healthcare than worry that something I can’t control- getting cancer, breaking my leg getting hit by a truck- would bankrupt me.

So the claim that HB is low and just rose to this stupendous level is wrong. HB claims at this level have been around for a long time.

The Tories are introducing – too slowly – a lower cap.

However it does show that billions have been wasted, and since its borrowed cash, its going to impact savers and others badly. You can’t separate out government action from the individual.

If we take incapacity benefit, 350 billion has been wasted. We know this because 93% of those currently being tested are losing ICB because they are fit for some sort of work. 350 is 93% of the ICB paid out over the years. That ignores the interest. Enough to fund over 2 years of deficit.

It is going to take a very long time to pay off the mess and its your money.

You real share of the debt is 225,000 pounds. Can you afford that?

Really?

What’s the level of spending made available this year compared to last?

You can’t blame the Tories.

There are going to be cuts. Look at the percentage of NHS spending going on wages, and the number of staff. Labour raised hugely your wages, and hugely increased the number of staff. As a result productivity in the NHS hasn’t increased by the same amount. In other words, a good example of why government shouldn’t be doing health care.

Then, for the US readers, there is the question of deaths in the NHS. The NHS’s own figures for the number of deaths where it contributes too or causes the death, is 20-80,000 a year. Under reporting of mistakes is rampant.

Then we have a current court case.

http://www.telegraph.co.uk/health/8726481/Widower-in-legal-fight-with-hospital.html

A widower is suing a hospital trust and the Health Secretary over his claims that doctors twice put “do not resuscitate” orders on his wife’s medical notes without her consent.

When challenged it was removed only to be replaced latter without his or her consent.

The US needs to avoid the NHS model of health care. You do end up with death panels.

If you want a model to follow that has universal health coverage, the one to look to is Switzerland. Everyone gets affordable coverage, and the regulator, supplier and insurers are split so there are none of the massive conflicts of interest that exist in the NHS. 20,000 deaths a year is just one of them.

Maintain humanity under 500,000,000 in perpetual balance with nature.
Guide reproduction wisely — improving fitness and diversity.
Unite humanity with a living new language.
Rule passion — faith — tradition — and all things with tempered reason.
Protect people and nations with fair laws and just courts.
Let all nations rule internally resolving external disputes in a world court.
Avoid petty laws and useless officials.
Balance personal rights with social duties.
Prize truth — beauty — love — seeking harmony with the infinite.
Be not a cancer on the earth — Leave room for nature — Leave room for nature.

“In June 2010 the maximum local housing allowance rate rose to £2,000 a week which would be equivalent to receiving £104,000 a year in housing benefit assuming the individual remains in receipt of the same level of benefit for 52 continuous weeks.”

Steve Webb MP/Minister of State for Pensions, 06 Sept 2010

I put forth this analogy: If a phone company were to give you free landline service for years and then one day happen to give you a marketing call on that line (for which they even second guess themselves a few hours later!) would you become angered and demand that those calls stop coming through YOUR phone? I’d think that most would weigh the call against the benefit of the fantastic service and deal. I imagine you wouldn’t drop the service until the phone company began giving you marketing calls daily, which I don’t see happening here (we’re not on the path to HuffPo or Fox Nation here, people).

As you no doubt can tell, I am for the rationale behind the post; my thoughts on the content will remain unsaid. However, I also believe in reaching a middle ground, so I propose a “Spoiler Alert” of sorts. JD and staff: you’re obviously perceptive enough to know when an article may be controversial. To that end, you could place a header right at the top: “Caution: This article addresses [economic/governmental/etc.] topics and may be seen by some as having a political bent. If this is not your cup of tea, please skip to the next article (it has cat pictures!).” Ah, choice! America!

Of course, you may not be concerned with that, as all Republicans are rich far cats anyway (or are on the verge of being so), and don’t need GRS anyway.

Secondly, there is no rule that says that each child has to have their own bedroom. The rule in that regard is that children of opposite sexes should not be housed together over a certain age (I think it’s around 8 years old), which is fair enough really.

The Conservatives cuts are going to gut the NHS, I work for the NHS and it is already struggling. My office can’t afford paperclips. Our filing goes in a shed in a courtyard because there isn’t enough room in the hospital. We have 500 new pregnancy bookings A MONTH. And no, most of them aren’t women having their 4th or 5th child, a lot of them are women having their first baby (although a lot of the women were born outside of the UK). The reason we have to take on so many women is that our hospital is the only one with a proper maternity suite for a huge area- Berkshire and Bucks plus a little more. The other hospitals don’t have proper maternity facilities.

If the government want to get back on track, they need to invest in new housing- knock down some of the council house estates and replace them with higher density flats which are built efficiently, to a high standard, and to last. Bring back vetting for the new houses so that you have to be employed to qualify.
Build new schools and hospitals that, again, will last well with room for the growing population. Sort out the train and bus monopolies so they can’t keep screwing over working people.
Make it so you have to be a British citizen to qualify for any benefits, tax credits or income support.

And most importantly, close the tax loopholes! The amount lost to the government in tax evasion vastly outweighs the amount lost in benefit fraud.