Comments by "Wojtek The Bear" (@wojtekthebear4958) on "PragerU"
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player276 Yeah, no we didn't. The first income tax we had was during the War of 1812, and the first peacetime one we had was in 1894 through the Wilson Gorman tariff. Our railroad infrastructure was still being built then, and we didn't even have much of a road system because cars weren't around yet. Highways and such didn't start being built until WW1, during the times of the income taxes. Similarly electricity was declared a public goods in the 1930's, so the governments started regulating electric companies, usually by subsidizing them in order for them to provide more electricity than they otherwise would have. As for our water infrastructure, I can't find any accurate information on its history. Basically my point is if you want to keep our power grid subsidized, and our highways working, you need to give the government some taxes to pay for it.
I'm sorry, I could've sworn that welfare programs were controlled by the government. Silly me, I guess they're controlled by Santa instead. Game Theory says that most people would've help the poor because it doesn't benefit their own interests, but we can't just have them dying on the street because few people want to help, so the government has to step in to fix the problem. I hate governments influencing an economy just as much as the next person, but even economics says that there are certain cases where government influence is necessary to reach a more efficient outcome.
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William Braganza Hanna Sigh, no. This is starting to get old. The roads are public sector. They are paid for through the public sector, are maintained through the public sector, and are public property. It's more like the private sector allowed to use public property if they serve the interest of the public by paying a tax to keep said public property running. I fail to see a problem with this. Just because you're so radically libertarian that you think EVERY tax is bad for some stupid reason, doesn't mean that society should suffer for it. We as a society like our streets, pathways, and transportation. Else we wouldn't be paying to drive cars and use buses. Mr. Joe Schmoe can not pay the tax all he wants and live a perfectly happy life biking to work or whatever, but in order to use government paid for and maintained roads, he needs to pay into the government fund that keeps them running.
By the way, there are two alternative to this. Either no one pays for the roads and they become unusable, or private entities form monopolies on the road and force tolls down your throat so they themselves can maintain the roads. Of course, being companies, they are going to try to maximize profits, so the tolls are going to be a lot more expensive than the tax you currently pay.
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garrett boyaci I feel like your trying to twist my words. No, I am saying that the government is more efficient at creating and maintaining public goods than the private sector due to many factors.
Think about it this way, if someone gave you a service for free and then asked for a small payment, though not paying it wouldn't affect your use of the service at all, would you pay for it? Of course not. This is what's known as the free rider problem. No one is willing to pay for a free service, and, if the roads aren't exclusive to paying customers only, a defining trait of a public good, then whoever runs said goods won't profit from it and then there would be no incentive for said road network. The government gets around this by taxing gasoline as a way to pay for the roads.
What if private companies made a whole road network based on toll roads, getting rid of their use as a public good? Well, as creating a road costs a crap ton and, similar to railroads, the government can't have fifty billion of them going everywhere, monopolies will naturally form. Obviously as monopolies are the lack of competition and the demand for roads is incredibly inelastic, the monopolies can charge outrageous tolls and little can be done. They also have little reason to make sure the roads are fully maintained as there's no one competing with them. If you don't think this will help, look at just about every utility company ever. Isn't it strange how most regions only have one electric company, one garbage company, and one water company? Also isn't it strange that 99% of governments decide to create the road network themselves instead of using private companies if this was a more efficient system?
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garrett boyaci I already answered this. Because it benefits society, which, in turn, benefits you. I've also already given specific examples of this, and have more to spare.
While I understand your position through those quotes, they in no way made it any more credible, especially since its just the same person being quoted each time. I was tempted to say this when you cited Mises but decided not to, so I'll say it here. Perhaps you should diversify your readings when it comes to economics. I (mostly) don't have a problem with Austrian economics, but it is a fringe school of economics at best. It would be best if you at least got the core ideas from the other schools of economics before you solely devote yourself to that one school, even if you end up disliking all the others anyway. That way you understand the argument in favor of, say, allowing the government to fund projects through taxation, even if you don't agree with them.
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Only people who don't understand the tax system try to stay below brackets. After all, when one enters a higher bracket, only the income in that bracket is taxed at that level. That's why there's a difference between one's tax rate in a tax bracket and their marginal tax rate (total tax rate). So if I earn $15,000 a year, and the first bracket is 5% from 0-$10,000 and 10% >$15,000 I am taxed at 5% for my first $10,000, which is $500, and 10% for the extra $5,000, which is $500, meaning I paid $1,000 on an income of $15,000, giving me a marginal tax of 6.66%. Just to prove I'm not making this up, here's a source for my claim (https://www.fool.com/taxes/2014/09/07/how-tax-brackets-really-work-and-how-to-make-them.aspx).
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player276 I never made a specification on government. Your state and local governments still need tax money just like the federal government does, and if you want them taking over more jobs (like repairing interstate highways as that is currently handed at the national level thanks to the power of regulating interstate commerce falling to Congress), you would need to pay them more money.
I also didn't contradict myself, though I should've explained myself better. I meant on an individual level compared to a societal level. Individually, a middle class or upper class person sees little reason to give money as it doesn't benefit them in any way. Compound this with asymmetric information as the donators don't know which non-profit is good/efficient and which ones aren't, and you're left with many people not donating. On a societal level, we can't morally have our poor starving to death though, so the government decides to intervene. I can bring up a good government initiative too! Here is the Earned Income Tax Credit, or EITC (https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/eitc-earned-income-tax-credit-questions-and-answers). Basically if you earned an income, but it's below a certain threshold, the government will actually subsidize your income instead of taxing you. It's a negative income tax. Not only is this highly supported by economists, but it incentives the poor to try and find work, and increases their percentage saving by giving the money to them as a lump some instead of throughout the year. Of course, as a welfare program on its own, it'd need some changes, but it has shown a lot of promise (http://www.nber.org/digest/aug06/w11729.html).
Also, the poor are mostly poor due to inefficiencies in the market, bad investments, and a slowly transitioning economy due to free trade. While the government could do a better job alleviating these issues, it was not a direct cause of them.
I'm a little curious though, where do you think the government's influence is too great? I'm not trying to be facetious; I honestly don't know the specifics of what markets the government is operating in.
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William Braganza Hanna Uh, there was an economic system in place between feudalism and capitalism. It's called mercantilism (https://en.wikipedia.org/wiki/Mercantilism). Anyway, yes, the infrastructure was funded through taxes once again. The bulk of our interstate highway system was built in the 1950's thanks to Eisenhower's Federal-Aid Highway Act of 1956. Notice how it says Federal Aid. Basically the federal government would pay 90% of the construction costs for the highways as long as the state forked over the extra 10% Where did this money come from? This is taken directly from the Department of Transportation's website: "the Revenue Act increased some of the existing user taxes, established new ones, and provided that most of the revenues from these taxes should be credited to the HTF (Highway Trust Fund)" (http://www.fhwa.dot.gov/reports/fifahiwy/fifahi05.htm). So taxes. It was funded by new taxes, specifically on gas and cars.
You also just used random words that sounded good. How is a financial system fascist? I didn't know my finances were extremely nationalistic and protectionist. Sure, they can be controlled partially by the government (socialism), but that's different from fascism.
Also, do you know why something like the interstate highway bill was needed? Economics dictates that there are four areas where government intervention can be necessary. Those are: natural monopolies, private versus public benefits (carbon tax), asymmetric information, and public goods. The highways are considered a public good. The reason being that as public goods aren't excludable. Technically highways are a common good, but the same theory applies in this case. Because no one can be excluded from using the highway and it is non-rival to a point, no one will volunteer to pay for it (why would they when someone else could and they'd still benefit?) so no one in the society pays for it. This leads to a decaying infrastructure system. The government knows this, so they force anyone who many use the highway system, mainly people who drives cars (car tax) and use gas (gas tax) to pay a small fee that will go into the Highway Trust Fund to maintain the infrastructure. That is, unless you want to privatize our infrastructure. That would most likely lead to tolls everywhere, making our road network excludable), and create a natural monopoly in most all areas thanks to the fixed costs of setting up shop. Then the government would have to step in to regulate the monopoly just like they do for our water and electricity.
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garrett boyaci Innovation has nothing to do with this. The only thing that matters are efficiency and the welfare of society.
Innovation is far from the only thing that creates monopolies. Actually, it is the least likely to create a monopoly. What creates them are the start up costs involved and the potential dividing of the market. Let's look at a typical electric company. What do they need in order to offer their service? They need a huge building to generate electricity, a generator, proper measures installed to handle the pollution, like air scrubbers, and then power lines to run directly to their customers' houses. This only works if they can guarantee a profit from their customer base. Now another electric company also starts thinking about setting up in the area. They too need to pay the costs associated with setting up, and too need to install their own lines. The problem here is that there's no guarantee they will get a significant portion of the market share, meaning they would expect profits. As profits are everything, they just won't compete. It wouldn't be profitable for them to build a power line across an entire street just to satisfy one house after all.
And I think the whole "you have no proof that it will cost you more" is directed towards monopolies, so I'll answer your claim here. Yes, yes, I do. If you have ever taken an into economics course, you will see this chart (http://www.jslon.com/AP_Economics/MicVis/fig11.9.gif). This is the graph of a market involving a monopoly. As you can see, the monopoly price at Pm is much larger than the socially optimal price of Pr. Pr is also the price for perfectly competitive markets as that's where marginal cost equals demand.
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Nah, I'm guessing his plan works similar to how ours does now. By the way, this isn't a flat tax, and it's bullcrap that he claims it is. If it were flat, everyone would be paying the same. Since he is giving tax break to the poor, this is still a progressive tax, just a simplified version. Anyway, as it works today, if you earn $54,000, you won't pay any taxes on the first $52,000, and will pay a 17% tax on the $2,000 it takes to go from $52,000 to $54,000, which would be $340. So you bring home $53,660.
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Billy Anderson Yep, you sound like a very intelligent person with all your grammar and spelling mistakes. I see no reason to not believe you. FYI: The Philadelphia Federal Reserve concluded that the Labor Force Participation Rate is down mainly due to the baby boomers retiring, the young taking longer to enter the labor force due to a need for a higher education, and an increasing amount of people claiming disabilities. The first of these being the most important.
Also, if all the stock brokers thought we were heading towards a recession, they wouldn't be investing in the stock market. Considering the Dow Jones is about to break 20 trillion, it's safe to say that's not the case. After all, the stock market is basically just investor confidence, and these stock brokers seem to be really confident. After all, if a recession happens, the stock market plummets and all the investors lose a crap ton of money, so, if they truly believed a recession was imminent, they would sell their stock before the stock plummeted. Note: I am not saying a recession won't happen in the near future, only that there is no way of telling. That's the whole point of the efficient market hypothesis.
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That REALLY is not how debt works, and I wish people would understand this.
First, China doesn't own a majority of our debt. Not even close. Last I checked they owned something like a third of a third of our debt, and their share is shrinking. In fact Japan owns more of US debt than China, but all foreign owned debt combined isn't greater than 30% of our total debt obligations. Second, our debt is in bonds, which don't work as normal debt. For bonds you only pay interest for however long the bond is issued and then pay back the principle amount of the bond when it matures. They also can't be called up early, so the US can't just go to one of the people they're indebted to, give them a chunk of money, and leave, as that's just not how a bond works. Second, up to 40% of US debt is held within the government. The Federal Reserve owns a huge chunk of it, so does the Social Security fund and other government funds. By the way the last 30% is held by private investors, usually US based, so it's the government owing money to US citizens, who are then taxed by said government.
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