Gingrich says he's considering presidential run

[Hauldren Collider]

The cost of government is NOT ONLY TAXES. There is a price we pay from our economy SEPARATE from that which we pay in the form of taxes. The fact that the government is performing the service instead of a private party IS AN OPPORTUNITY COST.

[Kidlicious]

The simpler I make this the more foolish you are going to look in the end.

We choose whether or not to have the government spend the money or to have the money stay in the private sector. Each one has benefits, not just having the money in the private sector. Similarly let's say a busness owns a factory and they produce two products (x and y). The opportunity cost of producing product x is the benefit of producing product y, and the opportunity cost of producing product y is the benefit of producing product x. To figure out how much of each product to produce the cost accountants don't figure in the opportunity cost of producing each product. That's stupid. They simply compute the real costs and the profit that can be made from each one.

That's why your statement was stupid, because you're assuming that it's always better to not have government expenditures. It doesn't work like that. There are opportunity costs to each one, government spending and not having government spending, but a discussion of those two is just stupid.

Shall we continue?

[Hauldren Collider]

you are so goddamn dumb

I love how his post starts out making some sense but by the end it's just a huge tailspin of WTF.

Opportunity cost is a real cost, to our prosperity and our wealth. Benefits can outweigh opportunity cost. Clearly some public goods demand government expenditure, no one disagrees with that. Not all do.

[Kidlicious]

Give me an example of what you are talking about when you say the cost of government spending is taxes and opportunity cost, and I'll tell you why it's stupid. Because you are so confused that I have no idea what is going on in your head.

[giblets]

To figure out how much of each product to produce the cost accountants don't figure in the opportunity cost of producing each product. That's stupid. They simply compute the real costs and the profit that can be made from each one.

Sure, and if you pick the less profitable option then you made a mistake, even if you make a profit, because of the opportunity cost. Likewise any form of government spending needs to be more profitable than the alternative.

[Kidlicious]

Sure, and if you pick the less profitable option then you made a mistake, even if you make a profit, because of the opportunity cost. Likewise any form of government spending needs to be more profitable than the alternative.

Let's move away for the word profit now. The context of my statement about spending was macroeconomic policy in a recession. My assertion was that cutting government spending in a recession causes unemployment. So profit doesn't fit into context. What we're talking about is jobs. So the cost of cutting spending is the loss in jobs. Similarly, we don't call it opportunity cost because that's stupid. Even more stupid would be to say that the cost is the loss of jobs plus the opportunity cost. Do you get it now?

[giblets]

Let's move away for the word profit now. The context of my statement about spending was macroeconomic policy in a recession. My assertion was that cutting government spending in a recession causes unemployment.

I'd agree.

So profit doesn't fit into context. What we're talking about is jobs. So the cost of cutting spending is the loss in jobs. Similarly, we don't call it opportunity cost because that's stupid. Even more stupid would be to say that the cost is the loss of jobs plus the opportunity cost. Do you get it now?

It's not stupid. If cutting spending causes a loss in jobs then that is part of the opportunity cost of opting for less government spending. I still have no idea why you think what HC wrote is objectionable.

[Hauldren Collider]

The argument I'm trying to make is that we could lose FEWER jobs by spending less stimulus money and focusing more on tax cuts (especially on capital gains etc) and encouraging private investment. Clearly both government spending and tax cuts promote job growth--which promotes MORE growth? This is the debate. Relative opportunity costs are the things that are in question here.

[Kidlicious]

It's not stupid. If cutting spending causes a loss in jobs then that is part of the opportunity cost of opting for less government spending. I still have no idea why you think what HC wrote is objectionable.

Then you just aren't following the argument and making an ass out of yourself right along with HC.

Notice that when I corrected him I said, "technically, there's only an opportunity cost." The taxes are the oppotunity cost. What's stupid is saying that the cost of government spending is taxes plus opportunity costs.

Stop making an ass out of yourself.

[Kidlicious]

The argument I'm trying to make is that we could lose FEWER jobs by spending less stimulus money and focusing more on tax cuts (especially on capital gains etc) and encouraging private investment. Clearly both government spending and tax cuts promote job growth--which promotes MORE growth? This is the debate. Relative opportunity costs are the things that are in question here.

Don't pull a BK on me now. I'm arguing against what you said, which was that the cost of government spending is taxation and opportunity cost. I told you that technically it's just the opportunity cost, and you started making an ass out of yourself.

[Hauldren Collider]

......uhh, I am still making that argument. I am not wrong.

Taxes are a direct cost, as well as an opportunity cost. When I buy a box of brownies instead of a box of donuts, the opportunity cost is the donuts and the cost is the amount I spent on the brownies.

[Kidlicious]

......uhh, I am still making that argument. I am not wrong.

Taxes are a direct cost, as well as an opportunity cost. When I buy a box of brownies instead of a box of donuts, the opportunity cost is the donuts and the cost is the amount I spent on the brownies.

But the brownies don't cost what the baker charges you plus the donuts. You can either say that they cost what you are charged or you can say that they cost you the donuts (opportunity cost), because you were never going to have the money and the donuts so you would have lost something you never had.

[Hauldren Collider]

um, what?

is it just me or does he simply not get opportunity cost?

[Kidlicious]

****! Dude what are you talking about, specifically, when you say it costs taxes and opportunity cost? Forget the donuts.

[Al B. Sure!]

kidicious... this is what I meant several posts back when I said your usage of the term opportunity cost was a misnomer... Economic cost /= opportunity cost.

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

As an example, consider the economic cost of attending college. The accounting cost of attending college includes tuition, room and board, books, food, and other incidental expenditures while there. The opportunity cost of college also includes the salary or wage that otherwise could be earning during the period. So for the two to four years an individual spends in school, the opportunity cost includes the money that one could have been making at the best possible job. The economic cost of college is the accounting cost plus the opportunity cost.

Thus, if attending college has a direct cost of $20,000 dollars a year for four years, and the lost wages from not working during that period equals $25,000 dollars a year, then the total economic cost of going to college would be $180,000 dollars ($20,000 x 4 years + $25,000 x 4 years).