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Thread: No Such Thing As A Free Lunch

  1. #1
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    No Such Thing As A Free Lunch

    On Twitter I saw this tweet with this pic...





    There's no such thing as a free lunch. The massive amount of resources needed to build a giant wall aren't going to magically appear out of thin air. They are going to be taken from other endeavors. However, this is just as true for the National Endowment for the Arts (NEA) as it is for a giant wall. Here's how I illustrated this...





    If you genuinely appreciate that every endeavor is going to take resources away from other endeavors... then clearly the goal should be to take resources away from the least valuable endeavors. This is Quiggin's Implied Rule of Economics (QIRE).

    Imagine that Batman is at home twiddling his thumbs. In this case, there would be absolutely no problem with having him rescue a cat from a tree. Batman would be put to a more valuable use. But what if Batman isn't at home twiddling his thumbs? What if he is actually trying to save Gotham from imminent destruction? Then it would be a terrible idea for him to stop what he's doing in order to rescue a cat from a tree. The opportunity cost would be way too high.

    So the most important question is... how do we determine the actual value of an endeavor?

    Market = Everybody decides for themselves, with their own money, which trade-offs are acceptable
    Not-market = Everybody does not decide for themselves, with their own money, which trade-offs are acceptable

    How many places are missing a market? The public sector is missing a market. Taxpayers can't decide for themselves, with their own taxes, which trade-offs are acceptable.

    Netflix is also missing a market. Subscribers can't decide for themselves, with their own fees, which trade-offs are acceptable. The NY Times is also missing a market. So is this forum.

    There's a multitude of places that are missing markets. Therefore...

    A. Markets aren't the best way to determine the value of endeavors?
    B. In some cases it's not necessary to know the value of endeavors?
    C. People don't understand the benefit of using markets to determine the value of endeavors?

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    Re: No Such Thing As A Free Lunch

    A problem exists with the idea of taxpayers earmarking their personal tax payments - they assume that they alone know what is best (highest priority) which is also not a market decision since their tax funds are gone no matter what.

    Using your given taxpayer choices of a building/manning a border wall or giving a NEA grant which would "win" is moot since we are talking about .00001% of a federal budget yet a taxpayer earmark poll of this sort dedicates up to 100% of their funds to one or the other.

    Imagine the chaos of placing millions of government programs, offices and/or write-ins as "options" for each taxpayer to allocate thier personal taxation funds toward. Gosh, we ended up with billions for wind farm subsidies and $500K for paying the military - I guess those people knew best so lets convert 99.9% of military bases into wind farms.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: No Such Thing As A Free Lunch

    Quote Originally Posted by ttwtt78640 View Post
    Imagine the chaos of placing millions of government programs, offices and/or write-ins as "options" for each taxpayer to allocate thier personal taxation funds toward. Gosh, we ended up with billions for wind farm subsidies and $500K for paying the military - I guess those people knew best so lets convert 99.9% of military bases into wind farms.
    There wouldn't be any "write-ins". If, at any time, you thought that the DoD needed more money, then you'd simply go to the DoD website and make a tax payment. You'd receive a receipt and save it in case the IRS wanted to verify that you were paying your fair share.

    Except for that last part, this is exactly how the non-profit sector works. Do you think that the non-profit sector is chaos? It's just millions of people deciding for themselves, with their own money, which trade-offs are acceptable. In other words, the non-profit sector is a market.

    Perhaps it helps to focus on a more simple example... Netflix. Netflix is in a market which means that you can decide for yourself, with your own money, whether it's worth it to subscribe. I'm sure that you agree that it's beneficial that you can choose for yourself whether or not you give your money to Netflix. Let's say that you do decide to subscribe to Netflix. Netflix is not a market which means that you can't decide for yourself, with your own fees, whether it's worth it to help pay for Westerns. Do you think it would be beneficial if you could choose for yourself how much of your fees you spend on Westerns?

    Let's say that a new Western movie comes out in theaters. You can choose for yourself, with your own money, whether or not you purchase a ticket to see it in the theater. I'm sure that you agree that it's beneficial that you can choose for yourself whether or not you can purchase the ticket. So wouldn't it be beneficial for Netflix to give you the option to decide for yourself how much of your fees you spend on Westerns?

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    Re: No Such Thing As A Free Lunch

    Quote Originally Posted by Xerographica View Post
    On Twitter I saw this tweet with this pic...





    There's no such thing as a free lunch. The massive amount of resources needed to build a giant wall aren't going to magically appear out of thin air. They are going to be taken from other endeavors. However, this is just as true for the National Endowment for the Arts (NEA) as it is for a giant wall. Here's how I illustrated this...





    If you genuinely appreciate that every endeavor is going to take resources away from other endeavors... then clearly the goal should be to take resources away from the least valuable endeavors. This is Quiggin's Implied Rule of Economics (QIRE).

    Imagine that Batman is at home twiddling his thumbs. In this case, there would be absolutely no problem with having him rescue a cat from a tree. Batman would be put to a more valuable use. But what if Batman isn't at home twiddling his thumbs? What if he is actually trying to save Gotham from imminent destruction? Then it would be a terrible idea for him to stop what he's doing in order to rescue a cat from a tree. The opportunity cost would be way too high.

    So the most important question is... how do we determine the actual value of an endeavor?

    Market = Everybody decides for themselves, with their own money, which trade-offs are acceptable
    Not-market = Everybody does not decide for themselves, with their own money, which trade-offs are acceptable

    How many places are missing a market? The public sector is missing a market. Taxpayers can't decide for themselves, with their own taxes, which trade-offs are acceptable.

    Netflix is also missing a market. Subscribers can't decide for themselves, with their own fees, which trade-offs are acceptable. The NY Times is also missing a market. So is this forum.

    There's a multitude of places that are missing markets. Therefore...

    A. Markets aren't the best way to determine the value of endeavors?
    B. In some cases it's not necessary to know the value of endeavors?
    C. People don't understand the benefit of using markets to determine the value of endeavors?
    I'll take the free lunch.....
    ..... and the only one to exist is the market in private goods. For public goods the only way to go is total transparency, robust control and reliable punishment for misuse.

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    Re: No Such Thing As A Free Lunch

    You can get a free lunch if you spend enough money at some places that advertise 'free beer tomorrow'.


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    Re: No Such Thing As A Free Lunch

    Quote Originally Posted by Xerographica View Post
    There wouldn't be any "write-ins". If, at any time, you thought that the DoD needed more money, then you'd simply go to the DoD website and make a tax payment. You'd receive a receipt and save it in case the IRS wanted to verify that you were paying your fair share.

    Except for that last part, this is exactly how the non-profit sector works. Do you think that the non-profit sector is chaos? It's just millions of people deciding for themselves, with their own money, which trade-offs are acceptable. In other words, the non-profit sector is a market.

    Perhaps it helps to focus on a more simple example... Netflix. Netflix is in a market which means that you can decide for yourself, with your own money, whether it's worth it to subscribe. I'm sure that you agree that it's beneficial that you can choose for yourself whether or not you give your money to Netflix. Let's say that you do decide to subscribe to Netflix. Netflix is not a market which means that you can't decide for yourself, with your own fees, whether it's worth it to help pay for Westerns. Do you think it would be beneficial if you could choose for yourself how much of your fees you spend on Westerns?

    Let's say that a new Western movie comes out in theaters. You can choose for yourself, with your own money, whether or not you purchase a ticket to see it in the theater. I'm sure that you agree that it's beneficial that you can choose for yourself whether or not you can purchase the ticket. So wouldn't it be beneficial for Netflix to give you the option to decide for yourself how much of your fees you spend on Westerns?
    That (bolded above) is a distinction without a difference. Whether you allocate your total annual taxes due as you see fit bit by bit or once per year changes nothing at all. The bottom line is that congress has the power to spend and they are not giving it up.
    “The reasonable man adapts himself to the world: the unreasonable one persists to adapt the world to himself.
    Therefore all progress depends on the unreasonable man.” ― George Bernard Shaw, Man and Superman

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    Re: No Such Thing As A Free Lunch

    Quote Originally Posted by Xerographica View Post
    There wouldn't be any "write-ins". If, at any time, you thought that the DoD needed more money, then you'd simply go to the DoD website and make a tax payment. You'd receive a receipt and save it in case the IRS wanted to verify that you were paying your fair share.
    So if not enough people decide the DoD need money this month, what do they do? Not pay their staff? Cancel those anti-terrorism missions? Quickly sell off some tanks to keep the lights on?

    What if not enough people think welfare needs more money? Do the people on food stamps just have to starve this week? What is not enough people think Medicare needs more money? Grandma’s hip replacement surgery gets cancelled again? What if not enough people think the Border Force needs more money? Close the doors and don’t let anybody in?

    Government spending can’t work like that. Running budgets and capital projects all need to be planned and have money allocated well ahead of time. It simply isn’t practical to have the kind of system you’re proposing at any kind of scale or for any kind of critical functions.

    Quote Originally Posted by Xerographica View Post
    Except for that last part, this is exactly how the non-profit sector works. Do you think that the non-profit sector is chaos?
    To an extent, yes. It’s full of corruption and inefficiency and highly imbalanced in what it actually supports. Anyway, large non-profit work the same way as government, collecting money on the basis of general principles for what they’ll spend it on but making the specific plans and budgetary decisions internally. Just because they say “$10 will feed a child in Africa” doesn’t mean the actual $100 you donate actually ends up being spent on that.

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    Re: No Such Thing As A Free Lunch

    Wow ... went I do this, it's a big deal.

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    Re: No Such Thing As A Free Lunch

    Quote Originally Posted by Xerographica View Post
    There wouldn't be any "write-ins". If, at any time, you thought that the DoD needed more money, then you'd simply go to the DoD website and make a tax payment. You'd receive a receipt and save it in case the IRS wanted to verify that you were paying your fair share.

    Except for that last part, this is exactly how the non-profit sector works. Do you think that the non-profit sector is chaos? It's just millions of people deciding for themselves, with their own money, which trade-offs are acceptable. In other words, the non-profit sector is a market.

    Perhaps it helps to focus on a more simple example... Netflix. Netflix is in a market which means that you can decide for yourself, with your own money, whether it's worth it to subscribe. I'm sure that you agree that it's beneficial that you can choose for yourself whether or not you give your money to Netflix. Let's say that you do decide to subscribe to Netflix. Netflix is not a market which means that you can't decide for yourself, with your own fees, whether it's worth it to help pay for Westerns. Do you think it would be beneficial if you could choose for yourself how much of your fees you spend on Westerns?

    Let's say that a new Western movie comes out in theaters. You can choose for yourself, with your own money, whether or not you purchase a ticket to see it in the theater. I'm sure that you agree that it's beneficial that you can choose for yourself whether or not you can purchase the ticket. So wouldn't it be beneficial for Netflix to give you the option to decide for yourself how much of your fees you spend on Westerns?
    If I’m thinking just of myself and that I’d like more X and I don’t care about Y, perhaps that makes sense. If I’m Netflix that probably doesn’t make sense and is not beneficial. Netflix has to care about the X and the Y because its subscriber base is more than one individual. You can say, well if enough people want Westerns and dictate their money be spent that way, then democracy in motion and they are appeasing their customers. But they are playing only to a subset, and the money they then have to spend on securing licenses may mean that they end up losing many more license agreements out of other genres and the people who enjoy those may end up so upset that they unsubscribe, thus costing Netflix money.

    From Netflix’s perspective, what they want to know is the number of Westerns they need to secure to keep you from unsubscribing, anything else can then be used to ensure that other people who enjoy other genres also do not unsubscribe. Making themselves into a “market” per say may actually cause them to lose money. They try to aggregate buying decisions and purchasing power to ensure the most number of licenses and shows across the many genres to ensure that people keep paying their monthly bill. In essence, it’s your QIRE again. Where does Netflix reinvest in in order to keep profits high? It may not be where “market” incentives would drive it to.

    Which is, in many ways, why government is not a market, why it is not a business, nor can it be taken for one.
    You know the time is right to take control, we gotta take offense against the status quo

    Quote Originally Posted by A. de Tocqueville
    "I should have loved freedom, I believe, at all times, but in the time in which we live I am ready to worship it."

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    Re: No Such Thing As A Free Lunch

    Quote Originally Posted by HonestJoe View Post
    So if not enough people decide the DoD need money this month, what do they do? Not pay their staff? Cancel those anti-terrorism missions? Quickly sell off some tanks to keep the lights on?
    Either the DoD serves us, or we serve the DoD.

    Quote Originally Posted by HonestJoe View Post
    What if not enough people think welfare needs more money? Do the people on food stamps just have to starve this week? What is not enough people think Medicare needs more money? Grandma’s hip replacement surgery gets cancelled again? What if not enough people think the Border Force needs more money? Close the doors and don’t let anybody in?
    What if not enough people buy meat? What if not enough people buy clothes? What if not enough people participate in online discussions about economics?

    Quote Originally Posted by HonestJoe View Post
    Government spending can’t work like that. Running budgets and capital projects all need to be planned and have money allocated well ahead of time. It simply isn’t practical to have the kind of system you’re proposing at any kind of scale or for any kind of critical functions.
    For-profit spending adjusts and adapts to changes in demand. Non-profit spending adjusts and adapts to changes in demand. Government spending can't adjust and adapt to changes in demand? Who told you that?

    Quote Originally Posted by HonestJoe View Post
    To an extent, yes. It’s full of corruption and inefficiency and highly imbalanced in what it actually supports. Anyway, large non-profit work the same way as government, collecting money on the basis of general principles for what they’ll spend it on but making the specific plans and budgetary decisions internally. Just because they say “$10 will feed a child in Africa” doesn’t mean the actual $100 you donate actually ends up being spent on that.
    Donors to the NRA and PETA don't pool their donations and elect representatives to divide the money between the two organizations. Because that would be an entirely stupid bundle. The government bundle of services is far more stupid. You have to pay for a bundle that includes killing people and protecting the environment. Seriously?

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