Bush Job Creation Promises Failing to Deliver

[Ned]

I find it interesting that economists are discussing marginal utility of the last dollar earned, as if that was something they even should desire to control, when what everyone wants is to be able to drive the economy to full employment and rapid real growth without intermittent recessions and stock market collapses.

[Kidlicious]

Originally posted by Ned
everyone wants is to be able to drive the economy to full employment and rapid real growth without intermittent recessions and stock market collapses.

Who said we economists aren't concerned with these things? Economic growth and increased utility are one and the same.

[Lawrence of Arabia]

You asked me if the govt should know how to maximize utility. Why did you ask me that if your answer is yes.

hmmm, i dont think I said that it should be yes.

No they don't. If their problem is an economic problem they only need to maximize total utility. They need not be concerned with individual marginal utility or individual utility for that matter.

no, you are looking at marginal utility, because total utility will always grow, as long as inputs keep up at a constant rate of growth. you are looking at how to divide up resources so that marginal utility will be maximized.

[Kidlicious]

Originally posted by Lawrence of Arabia
hmmm, i dont think I said that it should be yes.

Didn't you say that the govt can maximize utility by doing nothing, or something along those lines?

Originally posted by Lawrence of Arabia
no, you are looking at marginal utility, because total utility will always grow, as long as inputs keep up at a constant rate of growth. you are looking at how to divide up resources so that marginal utility will be maximized.

Look, let's assume that there is no productivity growth and there is full employment. How would you then maximize utility?

[Lawrence of Arabia]

Didn't you say that the govt can maximize utility by doing nothing, or something along those lines?

nah, i said 'how can the government know how to maximize utility for everyone?'

Look, let's assume that there is no productivity growth and there is full employment. How would you then maximize utility?

heh, i think you are talking about maximizing the utility for everyone: ie. taking resources and dividing them up equaly between everyone so that every single resources is being used up correct? well i dont know if thats possible, because if i use some cash to buy a car, well when im not driving it, its not being used to its maximum. property rights conflict with the maximization of utility on a national scale.

[Kuciwalker]

Originally posted by Lawrence of Arabia
taxing the rich more doesnt necessairly mean they will spend less. look at it this way - rich have lots of money, so each dollar has less value for him (basic economic principles) therefore, taking an extra 30,000 from them wont really mean much.

We ALREADY tax the rich more - even a flat tax would do what you suggest. If everyone pays 10% of their income, then the rich still pay more. They even pay more, proportionally.

[Kidlicious]

Originally posted by Lawrence of Arabia
nah, i said 'how can the government know how to maximize utility for everyone?'

No. You add up all of the utility recieved by each individual and that is total utility. The goal economics is to maximize utility.

Originally posted by Lawrence of Arabia
property rights conflict with the maximization of utility on a national scale.

Exactly. Property rights are only an economic issue if they are a determinant of utility in the study of economics. Property rights for the sake of the rights themselves is a political issue.

[Kuciwalker]

No. You add up all of the utility recieved by each individual and that is total utility. The goal economics is to maximize utility.

And you think the government is capable of doing this? Can you say "IRS"? Look at the immigration service, and how they approved the student visas for the 9-11 terrorists. There are a billion examples of how the government is completely and utterly incompetent.

[Kidlicious]

Originally posted by Kucinich

No. You add up all of the utility recieved by each individual and that is total utility. The goal economics is to maximize utility.

And you think the government is capable of doing this? Can you say "IRS"? Look at the immigration service, and how they approved the student visas for the 9-11 terrorists. There are a billion examples of how the government is completely and utterly incompetent.

I can barely handle LoA. You are the absolute worst econ student.

[Kidlicious]

I think I know what might be confusing you guys. It's not necessary for the govt to be able to calculate utility. Govts actions either increase or decrease utility. Economists theorize about how policies will do that.

[Lawrence of Arabia]

so what units is utility calculated in?

[Kidlicious]

Originally posted by Lawrence of Arabia
so what units is utility calculated in?

Utils are hypothetical units. The only way to measure an actual unit of utility would be to set experimental conditions, and even then you couldn't measure the utility of things that are needed for survival.

edit: The utility gained from one persons drinking water is greater than that of the utility gained from Bill Gates' mansion. The way that we know this is because if Bill Gates were dying of thirst in the desert he would trade his mansion for water in a heartbeat.

[DanS]

DanS, Listen to yourself. You seem to acknowledge that deficits have an economic effect, and then call for a balanced budget without reference to other economic factors or conditions.

That kind of thinking is the problem, IMHO.

I didn't reference those conditions, but they impact my thinking on the subject. Once the labor market starts picking up (any month now ), the recession in all of its forms will have ended and the reason for the deficits will have vanished.

If Bush wins reelection, he has 5.5 years of unencumbered policy-making in front of him. This seems to me to be more than enough time to mend the budget back to something close to balance by budget cuts.

[Lawrence of Arabia]

edit: The utility gained from one persons drinking water is greater than that of the utility gained from Bill Gates' mansion. The way that we know this is because if Bill Gates were dying of thirst in the desert he would trade his mansion for water in a heartbeat.

but utility changes depending on circumstances. if you had enough water and were homeless, then you'd want to get a house, which is worth more to you. so how does this get factored in?

[Vanguard]

Once the labor market starts picking up (any month now ), the recession in all of its forms will have ended and the reason for the deficits will have vanished.

The reason for deficits will have vanished, but only because taxation will become a relatively cheaper way for the US to raise money.

As for Bush "mending the deficit by budget cuts", well I just don't see how that could possibly work if he maintains his tax cut. It would require (at the very least) massive cuts in military spending, which does not seem likely.


Note: I have some changes to my last post, if anyone is still interested.