Tag Archives: Results

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MUST-READ: Correcting the economic myths that liberals/leftists believe

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Here’s a nice New York Post. (H/T Mary)

Full text:

According to Barack Obama, “The arguments of liberals are more often grounded in reason and fact.” But according to Margaret Thatcher, “The facts of life are conservative.” Who’s right?

Myth: The deficit was caused by Bush’s tax cuts.

Fact: For over four decades, 1960 through 2000, federal revenues averaged 18.2% of Gross Domestic Product and the trend was virtually flat. The final Bush tax rates became effective in 2003. In 2006 and 2007, well after the new tax rates were in effect, federal revenues were 18.2% and 18.5% of GDP, above historical levels. The federal government collected over half a trillion dollars more in 2007 than it did in 2000.

Myth: Republicans spent like drunken sailors.

Fact: Federal spending from 1960 through 2000 averaged 20.3% of GDP, with a slightly upward trend. The average over all Bush years, 2001 through 2008, was 19.6% of GDP – below the historical average. The 2001-2008 average deficit was also below the 1960-2000 average.

Myth: Republicans exploded the federal debt.

Fact: Per the US Constitution, “all bills for raising revenue shall originate in the House of Representatives.” Democrats controlled the House from 1955 through 1994, leaving the federal debt held by the public at 49.2% of GDP. Republicans then controlled the House from 1995 through 2006 and left it at 36.5% of GDP — below the level left by Democrat Congresses.

At the end of Bush’s presidency the debt was 40.2% of GDP. Now, two years post-Bush and four years of a Democrat Congress, the debt is 64% of GDP, the highest it’s been since Harry Truman was paying off World War II.

Myth: The deficit is due to the Iraq War.

Fact: The Congressional Budget Office calculated that the Iraq War cost $709 billion from 2003 through 2010. Total federal deficits over those eight years added up to $4.944 trillion, with the bulk of that ($2.968 trillion) added in just the last two years, after Bush was out of office.

By contrast, federal spending on education over 2003-2010 was $792 billion, and Obama’s stimulus will cost $814 billion. How often do you hear that our deficit problem was caused by education spending?

Myth: The Reagan and Bush tax cuts only benefited the rich.

Fact: According to the CBO, “The lowest three income quintiles have seen declines in their average tax rates since the early 1980s .¤.¤. The average tax rate on the top quintile has fluctuated more, with periods of increases and decreases, and was somewhat lower in 2007 than in 1979.”

In fact, the top quintile (top 20% of taxpayers) paid about 25% of its income in federal taxes in 2007, about the same as it did in 1982. By contrast, the middle and bottom quintiles paid less than 15% and 5%, respectively, both lower than at any time since 1979. The bottom two quintiles had negative average income taxes – they received more in tax credits than they paid in income taxes. Per the CBO, “In 2007, about 35 percent of households did not owe any federal income taxes.”

Myth: The deficit is due to military spending.

Fact: If federal military spending had been eliminated in its entirety in 2009, the deficit would still have been $776 billion, a historical high. Defense spending is less than one fifth of the federal budget and less than 5% of GDP. When the economy was doing quite well in the 1960s, defense spending was twice as high in those terms. In fact, President Bush presided over smaller defense budgets (as a fraction of GDP) than all presidents from 1941 through 1993.

Myth: “The last eight years,” “the last ten years,” “the last decade,” “the lost decade.”

Fact: From 2000 through 2007 real GDP grew 2.4% annually and real disposable personal income grew 2.8% annually. The economy added 5.5 million net new jobs in those years. The unemployment rate stood at 4.4% in May 2007, just before the newly elected, Democrat-controlled Congress raised the minimum wage.

From August 2003 through December 2007, over eight million net new jobs were created.

Fiscal year 2007 was the last one under a federal budget written by a Republican-controlled Congress, and marked the peak in real GDP, jobs, and the stock market. The bad economy of the “last ten years” was all in the last three years – under federal budgets written by a Democrat-controlled Congress.

Myth: Bush deregulated banks, causing the financial crisis. Fact: President Bush did not deregulate banks, or much of anything else. He increased staffing and spending on economic regulation more than President Clinton did. The number of pages in the Federal Register averaged more in Bush’s first term than at any prior time in US history. He signed the Sarbanes-Oxley Act of 2002, the most sweeping regulation of business since the New Deal.

The New York Times, no cheerleader for President Bush, said in 2003, “The Bush administration is rightly pushing for the Treasury Department to regulate the two giants [Freddie Mac and Fannie Mae], along with the network of federal home loan banks.” It was Barney Frank and other Democrats who helped kill such regulation. Frank said, “These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.”

Not a Myth: The above facts are matters of historical record. The sources of many myths are computer models rather than results from the real world. Remember the economic model that said the unemployment rate would not go above 8% if Obama’s stimulus was passed? The stimulus was passed, yet the unemployment rate went above 10% and has been above 9% for the last 19 months.

The models that say extending today’s tax rates would add to the deficit assume that tax rates have no effect on taxpayer behavior. That is an assumption virtually all economists, and most non-economists, know is false. Yet Congress requires the CBO to base its predictions on that bogus assumption.

The reality is that government spending is the problem. It is absurdly above historical levels right now and is unsustainable. It is driven by payments for individuals (64% of 2010 federal outlays) and entitlements, especially health care spending. ObamaCare did not bend the health-care cost curve down, either; it bent it up.

We have to go with Margaret Thatcher on this one.

What a great find by Mary!

Let’s re-post a Margaret Thatcher video and bask in her glorious competence and intelligence.

[youtub=http://www.youtube.com/v/okHGCz6xxiw]

She had a background in the hard sciences, like Angela Merkel, another conservative.

I think if Christian women want to impress men, they should talk like  the Iron Lady. Liberalism / leftism is really just selfishness, envy and blaming others for your own choices. What man wants to marry someone like that?

Videos

Sometimes good intentions meet unintended consequences

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A funny video from those crazy libertarians. (H/T Ari)

We should avoid making decisions on the basis of wanting to feel good about ourselves, because it can harm the very people we say we want to help. The right thing to do is to consider the consequences for ALL parties involved in a policy.

Commentary

Henry F. Schaefer assesses Stephen Hawking’s no-boundary proposal

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A little bit about Dr. Schaefer:

Henry F. Schaefer III was born in Grand Rapids, Michigan. He attended public schools in Syracuse (New York), Menlo Park (California), and Grand Rapids (Michigan), graduating from East Grand Rapids High School in 1962. He received his B.S. degree in chemical physics from the Massachusetts Institute of Technology (1966) and Ph.D. degree in chemical physics from Stanford University (1969). For 18 years (1969-1987) he served as a professor of chemistry at the University of California, Berkeley. During the 1979-1980 academic year he was also Wilfred T. Doherty Professor of Chemistry and inaugural Director of the Institute for Theoretical Chemistry at the University of Texas, Austin. Since 1987 Dr. Schaefer has been Graham Perdue Professor of Chemistry and Director of the Center for Computational Quantum Chemistry at the University of Georgia. In 2004 he became Professor of Chemistry, Emeritus, at the University of California at Berkeley. His other academic appointments include Professeur d’Echange at the University of Paris (1977), Gastprofessur at the Eidgenössische Technische Hochshule (ETH), Zürich (1994, 1995, 1997, 2000, 2002, 2004, 2006, 2008, 2010), and David P. Craig Visiting Professor at the Australian National University (1999). He is the author of more than 1250 scientific publications, the majority appearing in the Journal of Chemical Physics or the Journal of the American Chemical Society. A total of 300 scientists from 35 countries gathered in Gyeongju, Korea for a six-day conference in February, 2004 with the title Theory and Applications of Computational Chemistry: A Celebration of 1000 Papers of Professor Henry F. Schaefer III. In May 2010, the University of California at Berkeley will host a large international conference in Professor Schaefer’s honor, the title of the conference being Molecular Quantum Mechanics: From Methylene to DNA and Beyond.

Witness how the experimental scientist disagrees with the theoretical… speculator.

Let us return to Hawking’s no boundary proposal – the idea that the universe has neither beginning nor end. By treating the universe as a wave function, Hawking hopes to rationalize the universe’s popping into existence 12-15 billion years ago. Critical to Hawking’s research in this regard is the notion of imaginary time. The concept of imaginary time is a powerful mathematical device used on occasion by theoretical chemists and physicists. I remember clearly the day in the autumn of 1965, during my Complex Variables class as a senior at M.I.T., when I learned that the result of contour integration was two pi i times the sum of the residues. For me, it was about as close to a revelation as I had received up to that time in my life. My closest colleague at Berkeley, Professor William H. Miller, in 1969 used imaginary time to understand the dynamics of chemical reactions, and it made him a household word in the world of science. The use of imaginary time is indeed a powerful tool.

Indulge me while I attempt to convey the essence of how imaginary time is exploited in theoretical physics and chemistry. One approaches a well defined problem, with all variables necessarily being real. This means, for example, real positions for all particles, real velocities, and so on. Real problems begin with all quantities real. Then one undertakes a carefully chosen excursion into the complex plane, making one or more variables complex. Subsequently we do some really cool things mathematically. Finally, all the variables revert to real values, and we find that something important has been mathematically derived that would have otherwise been impossible to prove.

Hawking and Hartle’s no boundary proposal begins by adopting a grossly oversimplified model of the universe. Then the authors make time imaginary, and prove in their terribly restricted model that the universe has neither beginning nor end. The flaw in the exercise is that the authors never go back to real time. Thus the notion that the universe has neither beginning nor end is something that exists in mathematical terms only. In real time, to which we as human beings are necessarily attached, rather than in Hawking’s use of imaginary time, there will always be a singularity, that is, a beginning of time.

In an obviously contradictory statement in A Brief History of Time, Hawking actually concedes this point. What we are seeing in this situation is Hawking versus Hawking. I view the following statement as Hawking speaking in his right mind: “When one goes back to the real time in which we live, however, there will still appear to be singularities . . . In real time, the universe has a beginning and an end at singularities that form a boundary to space-time and at which the laws of science break down” (first edition, page 144). Only if we lived in imaginary time (not coming soon to a neighborhood near you!) would we encounter no singularities. In real time the universe was created ex nihilo 12-15 billion years ago.

With some trepidation, I will venture further. A case can be made that the Hartle-Hawking “no boundary proposal” is only of marginal scientific interest. The reasons for this conclusion might include: (a) the theory is a mathematical construct that has no unique empirical support; (b) the theory makes no verifiable scientific predictions that were not achieved earlier with simpler models; (c) the theory generates no significant research agenda. The primary purpose of the theory seems to be an attempt to evade the cosmological argument for the existence of God, via the claim that nature is self-contained and effectively eternal.

I’ll stick with the experimental guy.