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Old 09-10-2010, 07:26 PM   #61
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Of course, the problem with that theory is that the small-government crowd has controlled the Presidency for much of the past 30 years, and had a majority in Congress for much of that time, too, and really didn't shrink the government, or reduce the deficit/debt. ...
I don't think it's a problem with the theory - it's a problem with the implementation. The party to which you refer hasn't really been interested in smaller govt either. For most of us, it's a choice between tweedle-dee and tweedle-dum.

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Old 09-10-2010, 07:58 PM   #62
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Of course, the problem with that theory is that the small-government crowd has controlled the Presidency for much of the past 30 years, and had a majority in Congress for much of that time, too, and really didn't shrink the government, or reduce the deficit/debt. In fact, many think that the balance was tilted toward the well-off, to the detriment of the less well-off.
I think to be fair we would have to have a deficit/debt projection if 'the small-government crowd has controlled the Presidency for much of the past 30 years, and had a majority in Congress for much of that time' weren't there to see where we would be.

30 years ago only takes us to 1980. Much of our financial course was set in the 1960s and earlier.
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Old 09-10-2010, 10:17 PM   #63
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Governments allow business to prosper.
That's swell of them.
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Old 09-10-2010, 10:52 PM   #64
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The break even point is about risk and reward. If the cost of hiring help is 15k (my example) or 45k (your example) there is risk.

Risk that the person takes business away
risk that person might have to collect unemployment if things go bad
risk that person might go on disability and require certain benefits to be paid

In return for taking on those risks, I expect a return. Taxes influence the ROI. Is it worth those risks to add $8400 (your example) to the 500k I already earned?
It seems that these are the same as my example where the marginal revenue turns out to be less than the all-in costs. If unemployment costs you something, the after tax cost is less than the before tax cost. The same is true about disability. Maybe you're assuming a tax situation where those things aren't deductible, but I'm not aware of such a situation.

If the first means that the employee quits and steals customers (?) then the same rule holds. The higher the marginal tax rate, the less the after tax impact of the loss.

Income taxes reduce both gains and losses equally, so the way I look at it, there is no net increase in risk, jsut fewer dollars on the table.
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Old 09-11-2010, 11:21 AM   #65
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I don't think it's a problem with the theory - it's a problem with the implementation. The party to which you refer hasn't really been interested in smaller govt either. For most of us, it's a choice between tweedle-dee and tweedle-dum.

-ERD50
Make that tweedle-dumb and tweedle-dumber...

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I think to be fair we would have to have a deficit/debt projection if 'the small-government crowd has controlled the Presidency for much of the past 30 years, and had a majority in Congress for much of that time' weren't there to see where we would be.

30 years ago only takes us to 1980. Much of our financial course was set in the 1960s and earlier.
Certainly a fair assessment, though if you go back to 1968, there've been only four democrat presidents, though a lot more democratically-controlled Congresses.

I'm fairly non-partisan; don't care much for either major party, and think the Tea Party is just angry (for good reason), but I'm not sure they're angry at the right people, or for the right reasons. After all, when you're index finger is pointing outward, three other fingers are pointing back at yourself...

I don't know if we have the willpower, or the wherewithal, to fix our financial problems. Hope so...
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Old 09-11-2010, 03:12 PM   #66
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the hypothetical said "expenses are all in" which elimiantes the 2nd 2

What is
"Risk that the person takes business away"?
not objecting, simply not understanding
If you have a small business with maybe 10-20 clients, then hire a person, what is to stop that person from going on their own and taking business away from you if/when they leave? Depending on the field, that risk is real.

That risk is less with larger companies or longer sales cycles or more complex products/services.
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Old 09-11-2010, 03:16 PM   #67
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It seems that these are the same as my example where the marginal revenue turns out to be less than the all-in costs. If unemployment costs you something, the after tax cost is less than the before tax cost. The same is true about disability. Maybe you're assuming a tax situation where those things aren't deductible, but I'm not aware of such a situation.

If the first means that the employee quits and steals customers (?) then the same rule holds. The higher the marginal tax rate, the less the after tax impact of the loss.

Income taxes reduce both gains and losses equally, so the way I look at it, there is no net increase in risk, jsut fewer dollars on the table.
I agree with fewer dollars on the table
However as a percentage of the investment, the small business owner is looking at ROI as much as the total number (I think).

If there was 250k of money (profit) being taxed...
and the cost of hiring someone was 50k, the anticipated increase in revenue would be measured against the 250k vs the 50k (IMO). If I have to spend 50k to add 10k onto the table, might not be worth the risk... where as if I have to spend 50k to add 50k to the table, that might be enough return to justify the risk of hiring.

One way for government to help (or not hurt) is to keep the cost of hiring low (lower SS/medicare taxes and lower taxes on the additional profit). Much of the cost of hiring is in the unemployment side of things (disability and unemployment insurance and in extending Cobra and similar programs for the unemployed) as these actions increase the costs of hiring even when the employee is no longer working.
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Old 09-11-2010, 06:47 PM   #68
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If you have a small business with maybe 10-20 clients, then hire a person, what is to stop that person from going on their own and taking business away from you if/when they leave? Depending on the field, that risk is real.

That risk is less with larger companies or longer sales cycles or more complex products/services.
Well I suppose if the boss treats like dirt the people who actually supply what the client needs it will increase the risk that a client would actually prefer to cut out the jerk boss. but businesses sign contracts to deal with this all the time.
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Old 09-12-2010, 08:44 AM   #69
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I'm fairly non-partisan; don't care much for either major party, and think the Tea Party is just angry (for good reason), but I'm not sure they're angry at the right people, or for the right reasons. After all, when you're index finger is pointing outward, three other fingers are pointing back at yourself...

I don't know if we have the willpower, or the wherewithal, to fix our financial problems. Hope so...
I agree.
I'm past anger and onto acceptance.
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Old 09-12-2010, 01:25 PM   #70
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The problem is not big government or small government, it's dumb government. We had replaced discourse over the quality of government with sound bites designed to appeal to the devoted ignorant voters. Look at the screaming over schools. It must be the unions and the high pay and pensions. But in Germany the teachers are highly paid, heavily unionized and get fabulous pensions. But the students do very well. In Britain the teachers are heavily unionized, have lower salaries and the students don't do as well. Private schools for the elite are common in the UK and rare in Germany. In the USA you can get people foaming at the mouth about teachers. Good efficient government takes smart people and hard work, not slogans. In my youth I spent some time studying military procurement and why societies bought weapons that did not work or were unsuited to the task at hand. Ive looked at a wide variety of public and private and mixed procurement systems. It was hard to find a common thread, but in the main it seemed to come down to brainpower. Countries that insisted on top flight weapon designers and paid attention to their advice on averaged did the best. Those who want to sneer at government design and procurement should study the T-34 tank.

So the key is getting top people, not chanting slogans.
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Old 09-12-2010, 02:57 PM   #71
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The problem is not big government or small government, it's dumb government.
OK, if we accept that it should be clear why many of us want to limit the scope of this dumb government we seem to be stuck with. As a real-world analogy, if we can't improve the performance of an employee, and it isn't practical to replace them, we generally assign them to less important tasks. Limit their scope. So let's do it with govt too.

[MODERATOR EDIT] This gets interesting:

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Look at the screaming over schools. It must be the unions and the high pay and pensions. But in Germany the teachers are highly paid, heavily unionized and get fabulous pensions. But the students do very well. In Britain the teachers are heavily unionized, have lower salaries and the students don't do as well.
I guess you have found some new research since this post:
More Public Pension Woes—Constructive Suggestions Wanted

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There is simply is no research base that shows that can use student performance on standardized tests to demonstrate individual teacher influence on long term educational goals.
So there is a way to tie student performance to teacher performance. I knew it!

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Old 09-12-2010, 04:01 PM   #72
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The problem is not big government or small government, it's dumb government. We had replaced discourse over the quality of government with sound bites designed to appeal to the devoted ignorant voters. Look at the screaming over schools.
What smart governments are out there.

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It must be the unions and the high pay and pensions. But in Germany the teachers are highly paid, heavily unionized and get fabulous pensions. But the students do very well. In Britain the teachers are heavily unionized, have lower salaries and the students don't do as well.
They look pretty close in the rankings
Educational Score Performance - Country Rankings


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Private schools for the elite are common in the UK and rare in Germany.
7% in the UK - common? Looks to include colleges

Prep schools
There are 130,000 pupils in over 500 schools of all types and sizes. Prep schools may be for boys or girls only, or may be co-educational. They may be day schools, boarding schools, weekly boarding, flexi-boarding, or a combination.
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Old 09-12-2010, 04:28 PM   #73
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7% in the UK - common?
There's "common" and "common". Most middle-class parents in the UK know somebody whose kids are at a private school (typical fees $10K/year and up, without boarding) and perhaps 50% of all mid-level professionals making $80K/year at least think about private education for their children, at least at secondary (grades 6-12) level.

In comparison, most Germans do not know where their nearest private school is. It simply would not occur to most fairly senior German managers making $150-200K/year to send his kids to private education.
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Old 09-12-2010, 04:40 PM   #74
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What smart governments are out there.



They look pretty close in the rankings
Educational Score Performance - Country Rankings



7% in the UK - common? Looks to include colleges

Prep schools
There are 130,000 pupils in over 500 schools of all types and sizes. Prep schools may be for boys or girls only, or may be co-educational. They may be day schools, boarding schools, weekly boarding, flexi-boarding, or a combination.
My statement was that private schools for the elite are common.
by definition the elite is a small percentage of the population
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Old 09-12-2010, 07:58 PM   #75
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My statement was that private schools for the elite are common.
by definition the elite is a small percentage of the population
What is the definition of an elite?
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Old 09-12-2010, 09:23 PM   #76
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The problem is not big government or small government, it's dumb government. We had replaced discourse over the quality of government with sound bites designed to appeal to the devoted ignorant voters. Look at the screaming over schools. It must be the unions and the high pay and pensions. But in Germany the teachers are highly paid, heavily unionized and get fabulous pensions. But the students do very well. In Britain the teachers are heavily unionized, have lower salaries and the students don't do as well. Private schools for the elite are common in the UK and rare in Germany. In the USA you can get people foaming at the mouth about teachers. Good efficient government takes smart people and hard work, not slogans. In my youth I spent some time studying military procurement and why societies bought weapons that did not work or were unsuited to the task at hand. Ive looked at a wide variety of public and private and mixed procurement systems. It was hard to find a common thread, but in the main it seemed to come down to brainpower. Countries that insisted on top flight weapon designers and paid attention to their advice on averaged did the best. Those who want to sneer at government design and procurement should study the T-34 tank.

So the key is getting top people, not chanting slogans.
And all their govts are basically broke, choking on a ton of publice entitlements that they can't pay for............I don't think that in the USA teachers have low salaries, it's market driven like any economy, except that teacher's unions do a good job of getting them merit increases even as the states go broke..........

As a disclaimer, both my parents are retired teachers, and enjoy pensions and good healthcare. However, both of them understand the system is broken and were never ones to strike or criticize their administration when times got rough.........
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Old 09-12-2010, 09:46 PM   #77
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What is the definition of an elite?
It is a word derived from Latin, interestingly enough used in
English
French: élite
German: Elite
Spanish: élite

It has about the same meaning in all these languages. It means the small group that are considered "elect" whether in social power, skill money or any other scalable characteristic.

The UK has a socioeconomic "elite" that tends to shun the government schools. This has a variety of effects, many of which are widely debated.
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Old 09-12-2010, 10:03 PM   #78
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And all their govts are basically broke, choking on a ton of publice entitlements that they can't pay for............I don't think that in the USA teachers have low salaries, it's market driven like any economy, except that teacher's unions do a good job of getting them merit increases even as the states go broke..........

As a disclaimer, both my parents are retired teachers, and enjoy pensions and good healthcare. However, both of them understand the system is broken and were never ones to strike or criticize their administration when times got rough.........
Germany and the United States are actually very similar in national debt, depending on how you look at the numbers.

As to teacher pay there is a very goo OECD analysis at
http://www.oecd.org/dataoecd/39/62/1840245.pdf

one of the key differences is the low number of contracted hours German teachers have to work compared to the USA.
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Old 09-12-2010, 10:06 PM   #79
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Those who want to sneer at government design and procurement should study the T-34 tank.
?? What would we compare it to--all those tanks built and operated by the private sector and not to government specs?

But, the T-34 was a very good tank, at least better than almost any of the other (government-designed or government-procured) tanks fielded by other countries. It was built for the government of the Soviet Union, a country that produced perhaps the developed world's worst consumer goods. And a country that no longer exists, left in the dust by other countries with smaller governments and free markets. In the end, I'm not sure we can find much support here for the effectiveness of governmental central planning and program execution.
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Old 09-12-2010, 10:29 PM   #80
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?? What would we compare it to--all those tanks built and operated by the private sector and not to government specs?

But, the T-34 was a very good tank, at least better than almost any of the other (government-designed or government-procured) tanks fielded by other countries. It was built for the government of the Soviet Union, a country that produced perhaps the developed world's worst consumer goods. And a country that no longer exists, left in the dust by other countries with smaller governments and free markets. In the end, I'm not sure we can find much support here for the effectiveness of governmental central planning and program execution.
I believe you miss my point, but I'll try again. There is simply nothing "magical" about chanting a mantra of public or private. The soviet Union was a poor country that had suffered foreign invasion. The government was largely incompetent. But in every case success or failure depends on putting good people and adequate resources on a job, not describing it as public or private.
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