Small Business Lending Bill

[axordil]

It's less efficient

I've been thinking about efficiency in economic terms lately. Wouldn't a perfectly efficient economy be effectively jobless? That strikes me as a less than desirable result for a number of fairly obvious reasons, almost as bad as a perfectly inefficient economy.

[halplm]

Isn't that kind of like saying humans aren't part of the ecosystems of North America because we invaded and made a mess? And while it's common for people to believe that, the fact of the matter is, we're here and we've done what we've done and you can't build an accurate model without accounting for human activity.

I assume you're responding to me. No, I don't think anything I've said is anything like that.

[halplm]

It's less efficient

I've been thinking about efficiency in economic terms lately. Wouldn't a perfectly efficient economy be effectively jobless? That strikes me as a less than desirable result for a number of fairly obvious reasons, almost as bad as a perfectly inefficient economy.

I guess it depends on what you are trying to optimize. I'm trying to figure out what you could consider efficient about no jobs...

[Voronwë the Faithful]

Isn't that kind of like saying humans aren't part of the ecosystems of North America because we invaded and made a mess? And while it's common for people to believe that, the fact of the matter is, we're here and we've done what we've done and you can't build an accurate model without accounting for human activity.

I assume you're responding to me. No, I don't think anything I've said is anything like that.

Nor do I, and I want to remind everyone, yet again, to respond to what people actually say, not an "interpretation" of what they say that isn't clearly their meaning.

[N.E. Brigand]

As far as the CBO is concerned, I find most everyone making financial predictions is motivated by wanting certain results (much like climate scientists), so I prefer to look at real numbers rather than predictions.

So if you were given two budget options, how would you, without waiting ten years for the real numbers to come in, choose between them? If I told my boss, who each spring wants to know how much a given season of plays was going to cost and earn, that rather than provide him with a budget, which is a prediction (particularly on the income side), that he'd have to wait until next year to see how the numbers came in, he'd never be able to select a season.

Well, with two budget choices, it's quite simple, the one that costs less, provided, of course they are equal on the grounds of adequately meeting the funding for necessary government functions.

No, it's not that simple at all, because of the problem inherent in the latter part of your response. We at the theater have to guess how much each show will earn. It's an educated guess, based on past performance by similar shows, expected marketing plans, and so on, but is certainly a lot less scientific than the CBO's process. (We have no professional economists on staff here.) My question for you again is: how would you choose between two different budgets, which include a projected income, if you refuse to rely on someone's prediction?

[N.E. Brigand]

The problem with the CBO numbers is that they are only allowed to base their conclusions on the data (however faulty or not) they are given. For example, when you hear about the Clinton surplus, this is based on CBO analysis. But the data is incomplete, and in reality there was no surplus, when a true and accurate accounting of all the numbers is done (such as by the Treasury department).

Interesting. It does seem to depend on how one counts. Here is some commentary showing three different methods. One method shows a surplus in four years at the end of the Clinton term; another in two years; and the last in no years -- but one year comes tantalizingly close even by that measure, and by all three measures the late Clinton budgets appear to be better than anything before or since for some time.

More recently with Obamacare, and CBO numbers were being touted for the costs (and/or savings), but CBO personal were issuing caveats with it, and later issued reports with increases based on other factors received.

On the other hand, I've also seen commentary that the CBO tends to undervalue some likely savings in the health care plan. My question remains: if we don't use the CBO predictions to help choose a budget, what should we use?

[halplm]

So if you were given two budget options, how would you, without waiting ten years for the real numbers to come in, choose between them? If I told my boss, who each spring wants to know how much a given season of plays was going to cost and earn, that rather than provide him with a budget, which is a prediction (particularly on the income side), that he'd have to wait until next year to see how the numbers came in, he'd never be able to select a season.

Well, with two budget choices, it's quite simple, the one that costs less, provided, of course they are equal on the grounds of adequately meeting the funding for necessary government functions.

No, it's not that simple at all, because of the problem inherent in the latter part of your response. We at the theater have to guess how much each show will earn. It's an educated guess, based on past performance by similar shows, expected marketing plans, and so on, but is certainly a lot less scientific than the CBO's process. (We have no professional economists on staff here.) My question for you again is: how would you choose between two different budgets, which include a projected income, if you refuse to rely on someone's prediction?

Why is it hard to understand that different projected incomes don't matter when choosing which budget COSTS less?

I'm for less spending, not "spending a smaller percentage of what we might have in the future."

[vison]

Well, with two budget choices, it's quite simple, the one that costs less, provided, of course they are equal on the grounds of adequately meeting the funding for necessary government functions.

That's an interesting assertion. I can't imagine any government department putting forward TWO budgets for different amounts that will "adequately meet the funding necessary for government functions".

"Here, let's spend $75 million on this. Or, say, we could do exactly the same thing for $50 million! Which one should we choose?"

I don't see that sort of thing happening.


As well, I have some experience in proposing budgets for public work and not once have we ever casually decided to spend more than was needed.

[N.E. Brigand]

Why is it hard to understand that different projected incomes don't matter when choosing which budget costs less?
I'm for less spending, not "spending a smaller percentage of what we might have in the future."

Now I understand. I was comparing the gov't. to a business or n.p.o., where growth in spending might be acceptable or even desirable so long as it's paid for -- to me, the gov't. is an institution meant to achieve certain goals ("to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity") for which the smallest size might not be the right size.

[halplm]

Well, with two budget choices, it's quite simple, the one that costs less, provided, of course they are equal on the grounds of adequately meeting the funding for necessary government functions.

That's an interesting assertion. I can't imagine any government department putting forward TWO budgets for different amounts that will "adequately meet the funding necessary for government functions".

I can't imagine that either, but that's the hypothetical I was given.

"Here, let's spend $75 million on this. Or, say, we could do exactly the same thing for $50 million! Which one should we choose?"

I don't see that sort of thing happening.

Oh, it's not "exactly" the same thing they would be choosing from. The extra $25 million would be for something, and it might even be something good, but is it something necessary?

As well, I have some experience in proposing budgets for public work and not once have we ever casually decided to spend more than was needed.

I'm not sure it would be referred to as casual, but more often it is purposeful.

[halplm]

Why is it hard to understand that different projected incomes don't matter when choosing which budget costs less?
I'm for less spending, not "spending a smaller percentage of what we might have in the future."

Now I understand. I was comparing the gov't. to a business or n.p.o., where growth in spending might be acceptable or even desirable so long as it's paid for -- to me, the gov't. is an institution meant to achieve certain goals ("to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity") for which the smallest size might not be the right size.

If the funds for the government did not come from the people it governed, you would be right. However, when the government getting bigger actually hurts the general welfare or removes liberty, particularly for our Posterity... that's a problem.

[N.E. Brigand]

Why is it hard to understand that different projected incomes don't matter when choosing which budget costs less?
I'm for less spending, not "spending a smaller percentage of what we might have in the future."

Well this is interesting. A helpful chart seems to show that the best way to reduce the size of government --if that is one's goal-- is to raise taxes. At least, in 1990, "George H.W. Bush made a deal with Congressional Democrats to hike taxes and restrain spending ... [and] the slope of outlays that followed after that [went] Down, down down." And the same thing happened in 1993. Why does it work? Because "since nearly all actual government programs are popular, securing bipartisan agreement is the only way Republicans have ever successfully reduced spending."