Comments by Pacer

I don't know that we want to set the price so high. If we manage immigration with standards, education obligations and settlement policies that deter 'ghetto-ization' of newcomers, it will only strengthen our own future.

On the other hand, it would be awesome if we could start exporting some of our less-ambitious people...

Quite correct on all counts. But the clock on earth's resources is already in the last quarter anyway. It will be a short day for the up-and-comers. Soon we all reap the limits of growth.

And--yes blast away--perhaps birth control.

Yes fair, but detrimental to the economies that would prefer to keep the outsized share of earth's resources they have become quite accustomed to.

Too late to put the genie back in the bottle, however. See the article on airborne bird flu for long-term sustainability solutions.

As you say adherence is up to the legislative rules committee in each body, but what the single subject rule holds out is a little bit less 'packing' of bad policy into necessary/wanted measures. Too often policymakers are faced with buying off a few special interests to move something that is otherwise consensus.

Though I am a hard money Ron Paul supporter, I completely concur that a gold standard--or any other commodity constraint on money is a bad idea that also misses its own mark.

What is important is that there be a controlled rate of growth in the money supply and that the rate and recipients be completely transparent to all market actors. Both are lacking with today's system.

I would prefer a system where control of the currency is restored to the U.S. Treasury, and the Constitution is amended to provide that Treasury may print/create no more than a certain amount of additional currency each year to fund the government's operations. The necessary trade-offs would be 1) a prohibition on further issuance of Treasury debt; and 2) the requirement of a 2/3 vote to exceed the printing cap, as well as a 'super cap' that cannot be exceeded without Constitutional amendment.

Yes, but then we would pay those higher wages to people we 'value' i.e. here at home. There are billions to whom your 'slave' wages represent a massive improvement in living standards from the opportunities that preceded them.

Don't get me wrong. I'd prefer that we in the West had stayed in the one car, one TV, one phone per household mode rather than awakened the other 2/3 of humanity to the notion of consuming at more than a bare subsistence level as they did pre-industrialization. We essentially lopped a century off our own Golden Age for a few decades of credit-fueled decadence. And most of what we gained is already in our landfills.

Taking the vote away from the dependent class might just be the way to end poverty -- politicians would then have a real incentive to get their constituents out of poverty. Today the incentives run opposite for many of the 'bosses' in Washington and the state capitals.

Oh dear. I don't think the climate models have yet accounted for the byproduct emissions of brimstone combustion. I wonder if those who believe in the rapture would also agree that brimstone-induced global climate change is real and just dessert for those sinners left behind to live in an overheated world...

American disengagement with the political process is greatly abetted, and perhaps caused to large extent, by the proliferation of entertainment options we've experienced with the advent of petroleum-powered transportation and electronic mass media.

The former will diminish over time as its key dependency (fuel) becomes more dear and replacement options prove less than equivalent. Of the latter, I think only the internet--due to its self-guided and free authorship aspects--holds out the promise of re-engaging Americans with their government in a critical way. The rest has become almost exclusively bias-creating and bias-reinforcing noise. Multiparty politics would be an improvement nonetheless.

So would it aid measurably if legislatures implemented 1) single subject rules; 2) plain language readability requirements for bills; 3) hard limits on the wordcount of bills? Of these three, I believe that #1 would be the most important improvement to efficiency and transparency.

"capital gains is double taxation"

True; so at this moment are personal income taxes on dividends. One simple solution is to eliminate corporate taxes (since I recently read that the majority of the largest corporations pay none anyway, it might not hit revenue too hard) and tax profits at the individual level only. Then perhaps we won't feel the need to treat different forms of income differently.

Dispensing with that issue, we can move on to more meaty topics like replacing payroll taxes (which penalize domestic employment) with VAT (which favors exporters in a WTO-compliant way). Or figuring out what to do with the suddenly-unneeded masses of well-trained coroprate tax accountants and lawyers and consultants...

"You can argue that high capital gains taxes don't actually produce that much more revenue because they just lead people to hold assets for longer."

Why would holding periods be longer unless the taxpayer's expectation was that future tax rates would be lower? Otherwise, how are capital gains different than any other income over which the taxpayer has some discretion in terms of timing/recognition? By this logic, shouldn't we also be concerned that IRAs, 401(k)s and deferred compensation plans also increase the holding period of assets and thus decrease market efficiency?

On the other hand, one could argue that monetary policies aimed at continuous inflation are a bigger factor distorting holding periods and efficient use of certain assets. On one hand it reduces the attractiveness of cash (perhaps a good thing) but complicates the deployment of that cash by making hard asset sellers less willing (bad?) because they assume prices are only allowed to go up--most of the time.

However there is at least one theme here that I think is important to keep front and center--that being the unintended market-distorting consequences of simplistically well-meaning government policies. The more government does--aside from antitrust, anti-fraud, property right protection and providing an adequate judicial system--the more of these distortions pile up. And then we get into a mess and it's impossible to sort out the natural (market) from the man-made (state) causes. So we just add more policies on top, and get more distortions.

RR - I see your point about capital gains being already taxed at the corporate level. So would you think it logical/desirable to lower or eliminate corporate-level taxes and then treat all personal income alike? This of course, would obviate the parallel discussions about corporate tax treatment of interest vs dividends.

Then we can get into the more exciting issues like replacing payroll taxes with VAT, eliminating personal income tax loopholes to give meaning to the brackets, and adding a withholding tax to interest on federal/state/municipal debt paid to persons who are not subject to US income taxes.

But could widespread 'hoarding of money' not simply be an indication that the current price level has not fallen to real value? One problem that policymakers seem to grapple with is the assumption that prices ought only go up or remain stable, unless it's for electronics or imported oil. Is there never a right time to allow correction of past "irrational exuberances?" Or are wages not also subject to irrational exuberance?

In my opinion it is wrong to presume that this history holds--workers won't take paycuts so layoffs or subsidies are the only means of correction for falling demand. It's only true if monetary authorities continue to insist upon constant inflation.

"And who holds the most bonds? The 99% or the 1%?"

Well. Who owns pension funds? Or purchases insurance/annuities that has a component of price that is inverse to bond returns? Or has savings in the bank? Surely not just the 1%. Nor are all debtors in the 99%.

Meanwhile everyone bears the burden of inflation, it's just distributed 'regressively' in tax parlance. On top of that, the 1% get advance warning of inflation, have access to hedges, and in the case of banks can borrow today's money cheaply to buy assets that will tomorrow be inflated.

That anyone thinks inflation benefits the common worker more than a system more rigorously focused on a zero net effect of monetary policy on natural supply/demand inflation, is either confused or conflicted.

Served America well how? If anything the new government debt (both the nominal amount and the GAAP amount associated with GSE guarantees that aren't even being counted) compounds the already gaping mismatch between future revenues and expenditures, and the QE maneuvers have caused suffering on top of deleveraging by households. But of course, all of this has allowed Wall St. to resume bonuses and dividends and avoid shrinking back to its historical share of the economy (about half what it was in 2007).

From this vantage point, Americans should see that they've gotten a bit of opiate while the disease has spread from a small group of corporations (and yes, the stock market and its broad base of holders at least in the short term) to our entire economic future.

"Of course, the industry could insure itself, but any voluntary scheme would run into the problem of selection bias that dogs insurers generally."

Actually, insurers are quite capable of dealing with selection bias through underwriting. What dogs insurers is the constant intervention of the state/regulator in proscribing the methods that insurers use to appraise and price risk. Take credit scores for example, which were excellent at predicting losses on home and auto insurance and resulted in accurate risk pricing, but which were driven to less effectiveness by states concerned about disparate impact on low-income and minority insurance customers.

To wit: trade credit insurance works just fine in part because it is largely de-regulated compared with, say, personal lines.

So if the state's involvement in bank deposit insurance was limited to a) prohibiting anti-competitive collusion and cross-ownership; b) policy form mandates such as requiring 'incurred basis' coverage rather than claims-made coverage; and c) imposing risk-based reserving/solvency standards on the private deposit insurers, there is no reason to think that private deposit insurance could not work in place of current government schemes.

Shakier banks would pay higher premiums for deposit insurance (and then suffer lower profits), or they would forego it (and use alternative incentives to attract deposits). Either way we'd have more transparency and less socialization of losses--both allegedly desirable things.

Thank goodness the world's policymakers are mostly just trying to pick winners in the financial industry instead of throughout the economy. We'd most of us all starve if farmers expected to pinch so much between soil and table, year-in, year-out, rain or shine, bees or locusts.

Bad debt is bad debt. Is this article just talking about the prospect that more bad debt will be recognized (and by who) in 2012 versus some later date (perhaps by someone else)?

The assumption of perpetual real growth in a finite world is pretty ridiculous from a mathematical standpoint. Old habits do die hard though.