Gingrich says he's considering presidential run

[giblets]

Also, taxation does not always have an opportunity cost. Econ lesson over.

Taxation always has the opportunity cost of the person who is taxed not getting the chance to spend it. Any tax policy, as far as I know, will take some money from some people who would have otherwise spent it, so any tax policy will have some sort of opportunity cost.

[Al B. Sure!]

I'm sorry. I tried to preempt it...

opportunity cost is the benefit foregone by choosing one of different, mutually exclusive alternatives.

I'd hope that in someone's benefit calculus, they would consider the benefit foregone of a possible alternative minus the benefit gained from their decision. And if that leaves them with a negative value, they made a boo boo (I realize we have pedantic idiots here. Benefit foregone as a negative plus the benefit gained. If that leaves them with a negative number, they made a boo boo.)

But kidicious just skipped over what I said and wanted to continue the troll.

[Hauldren Collider]

Al B. Sure: Sorry I missed your post. You are also correct, and as usual, Kid is wrong.

[Kidlicious]

I'm sorry. I tried to preempt it...



But kidicious just skipped over what I said and wanted to continue the troll.

e

[giblets]

What you posted had problems but I didn't think you were as clueless as the other two. I guess I was wrong. I'm not going to argue with fools.

You're the one who doesn't understand what an opportunity cost is. It takes a special kind of moron to both be wrong and insist that everyone else is stupid for correcting him.

[Kidlicious]

I'm sorry. I tried to preempt it...



But kidicious just skipped over what I said and wanted to continue the troll.

I'll explain to you why what he said is wrong.

"The cost of government is not only taxes. There is also substantial opportunity cost."

The cost of government can't be taxes plus the benefit of not taxing, because there are benefits from the taxes that are recieved. You have to compare the benefits of the taxation to the benefits of not taxing. In a recession all resources are not used therefore taxation has no opportunity cost.

There is however, that cost to the economy if the taxes are collected to pay off debt instead of used as spending.

Essentially I was saying that the proposition that the total cost of government is the actual cost plus the opportunity cost is nonsensical.

[Kidlicious]

You're the one who doesn't understand what an opportunity cost is. It takes a special kind of moron to both be wrong and insist that everyone else is stupid for correcting him.

Only fools keep arguing with people who don't want to talk to them.

[Elok]

You're the one who doesn't understand what an opportunity cost is. It takes a special kind of moron to both be wrong and insist that everyone else is stupid for correcting him.

Actually, they're pretty common. I remember I was in a college classroom once when the professor alleged that ultra-rich celebrities only start foundations and such to get to a lower tax bracket. I said no, that doesn't make sense mathematically because you're taxed the higher percentage only on the amount within the higher bracket, so if they paid enough to drop their income a bracket they'd be--and I was promptly cut off by the entire class telling me I got it all wrong. One lady actually said, "Why do you think I donate tons of old books every year? Because it lowers my taxes!" They shouted me down before I could explain, and the conversation moved on.

Afterward I looked it up online and discovered that not only was I right, but that someone like Bill Gates would have to give away 99% of his annual income to drop to a lower bracket and not-save his money. The highest bracket began at a little over $200K, IIRC.

Yeah, this is irrelevant, but I suddenly remembered it and felt like venting.

[Al B. Sure!]

I'll explain to you why what he said is wrong.

"The cost of government is not only taxes. There is also substantial opportunity cost."

The cost of government can't be taxes plus the benefit of not taxing, because there are benefits from the taxes that are recieved. You have to compare the benefits of the taxation to the benefits of not taxing. In a recession all resources are not used therefore taxation has no opportunity cost.

There is however, that cost to the economy if the taxes are collected to pay off debt instead of used as spending.

Essentially I was saying that the proposition that the total cost of government is the actual cost plus the opportunity cost is nonsensical.

Kid:

Did I not say:

I'd hope that in someone's benefit calculus, they would consider the benefit foregone of a possible alternative minus the benefit gained from their decision.

? What was the point of all that. I already said it.

now,

In a recession all resources are not used therefore taxation has no opportunity cost.

That's something entirely different. Interesting idea but I can't think about that right now.

[Hauldren Collider]

I'll explain to you why what he said is wrong.

"The cost of government is not only taxes. There is also substantial opportunity cost."

The cost of government can't be taxes plus the benefit of not taxing, because there are benefits from the taxes that are recieved. You have to compare the benefits of the taxation to the benefits of not taxing. In a recession all resources are not used therefore taxation has no opportunity cost.

There is however, that cost to the economy if the taxes are collected to pay off debt instead of used as spending.

Essentially I was saying that the proposition that the total cost of government is the actual cost plus the opportunity cost is nonsensical.

jesus kid, you may as well replace this entire post with

KID IS RETARDED

[Kidlicious]

? What was the point of all that. I already said it.

You seemed to disagree with me, although I wasn't disagreeing with you so I was clarifying.

[giblets]

I'll explain to you why what he said is wrong.

"The cost of government is not only taxes. There is also substantial opportunity cost."

The cost of government can't be taxes plus the benefit of not taxing, because there are benefits from the taxes that are recieved. You have to compare the benefits of the taxation to the benefits of not taxing. In a recession all resources are not used therefore taxation has no opportunity cost.

There is however, that cost to the economy if the taxes are collected to pay off debt instead of used as spending.

Essentially I was saying that the proposition that the total cost of government is the actual cost plus the opportunity cost is nonsensical.

HC: "The cost of government is not only taxes. There is also substantial opportunity cost."
Kidicious: Nah, taxes are beneficial because they pay for government, therefore taxes are not a cost of government because they pay for government

Is that what Kidicious is trying to say?

[Al B. Sure!]

I was going to say that I was disagreeing with this:

Also, taxation does not always have an opportunity cost. Econ lesson over.

But now I see, having re-read over things, that how I took it might not necessarily have been how you meant it. I (and I'm sure gribbler and HC) took it as you were saying that taxation doesn't have an opportunity cost contingent on what the benefits received of the spending are. So I was pointing out that that doesn't mean there is no opportunity cost. There is a difference between opportunity cost and NET cost/benefit. To clarify, there is (generally*) always an opportunity cost because there are other things that the money can be spent on but you have to consider those benefits foregone with the benefits gained from the taxation and it could very well be, if the benefits exceed the benefits foregone...

although I wouldn't use the terms "no opportunity cost". An opportunity cost is a specific thing that doesn't technically diminish, I believe. It stays fixed equal to the benefits foregone of each alternative. Your mis-use of the terminology caused problems and confusion. Maybe if you had said something like "taxation does not always have a net economic cost".

*the reason why I said generally is because of the recession point you made. I don't know if during a recession people would necessarily all just hold their money as cash and if so, well then, yeah, you only lose value through inflation so taxing it would be 'better'. But I don't know what would be said about the opportunity cost of future usage of the money. The PV of the future usage of the money that is precluded by it being taxed should probably be taken into account. Remember, opportunity cost in general is a forward-looking concept so I'm not sure the money sitting around for a year as cash before being used really affects the matter as compared to if it were used immediately (the benefits of an investment in capital, for example, would be down the line as well). Don't know much about how time relates to opportunity cost.

[Kidlicious]

Technically the cost of government is the cost - the benefit. The assumption (as in his statement) that there is no benefit to government, implies that the opportunity cost of government is the benefit that every dollar not taxed would bring to the economy. That's why I said that what he was saying was that the opportunity cost is the cost.

[Kidlicious]

although I wouldn't use the terms "no opportunity cost". An opportunity cost is a specific thing that doesn't technically diminish, I believe. It stays fixed equal to the benefits foregone of each alternative. Your mis-use of the terminology caused problems and confusion. Maybe if you had said something like "taxation does not always have a net economic cost".

Well what he said is ridiculous anyway because he's applying the concept of opportunity cost (which is good for microeconomic problems) to a macroeconomic problem. Do you see the problem of comparing to the two best possible alternatives and their respective opportunity costs? That's why what you do is simply compare the accounting costs of the two.

*the reason why I said generally is because of the recession point you made. I don't know if during a recession people would necessarily all just hold their money as cash and if so, well then, yeah, you only lose value through inflation so taxing it would be 'better'.

In fact, the banks are holding money as is always the case (in a recession).

But I don't know what would be said about the opportunity cost of future usage of the money.

That's the problem, because the money is still there in the future being used whether it is taxed or not. If it goes to pay off debt and that debt is owned by foreigners that that should be taken into account, but likewise if it isn't taxed and used to by foreign goods that would also be taken into account. But the point is that the whole idea of adding opportunity cost doesn't make sense.