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Topic: More on the economic stupidity of economic conservatism (was Martin
Bic...)

Replies: 8   Last Post: Sep 10, 2012 10:42 PM

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Robert Hansen

Posts: 7,600
From: Florida
Registered: 6/22/09
Re: More on the economic stupidity of economic conservatism (was Martin Bic...)
Posted: Sep 7, 2012 2:16 PM
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Please Paul, in a paragraph of 4 or 5 sentences, WHERE DOES THE MONEY COME FROM?

Bob Hansen

On Sep 7, 2012, at 1:42 PM, Paul Tanner <upprho@gmail.com> wrote:

> The further below is yet more fact-denial in the name of economic conservatism.
>
> It's a fact that Norway is vastly more prosperous than the US (again,
> nominal per-capita GDP twice as large as that of the US), and its a
> fact that all four major Scandinavian countries and a few other
> countries of Europe like Switzerland and Netherlands also have had
> larger nominal per-capita GDPs than the US for almost every year of
> the last few decades.
>
> That countries have such higher percentages of GDP coming from
> government than the US also having greater prosperity than the US
> causes severe cognitive dissonance in the conservative mind - that's
> quite understandable.
>
> Quite understandable since another conservative myth is that
> government is necessarily a drag on an economy - this conservative
> myth is that the greater percentage it is of GDP, the less growth and
> prosperity for the economy as a whole.
>
> This myth is yet another one held by conservatives that is busted by
> fact - this fact: When we look at all the countries of the world or
> even just the countries of the OECD, there is no correlation between
> growth rates and percentage of the economy that is government. In
> fact, if there could be any correlation at all to be found, it would
> the greater the per-capita nominal GDP, the greater the percentage of
> nominal GDP is government.
>
> One can easily verify this for oneself by looking at lists of
> countries by per-capita nominal GDP (look at all the
> socialist/capitalist European and other OECD countries ahead of the US
> by this measure of GDP)
>
> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
>
> or by per-capita PPP GDP
>
> http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita
>
> and then comparing them to lists of countries by taxes or by
> government spending as a percentage of GDP (click on the appropriate
> parts above the list further down the page to get ascending or
> descending orders for taxes and then for government spending)
>
> http://en.wikipedia.org/wiki/Government_spending
>
> (and note that this above page seems to use for its list the PPP
> measure of GDP).
>
> If there is any statistical trend at all that emerges from the
> comparison, it is that the richer the country in terms of per-capita
> GDP, the higher the percentage of GDP is government. (No, such a
> correlation perfect, but that is not what a trend is.)
>
> (Side note on nominal vs PPP measures of GDP: The much more used
> measure by professional economists is the nominal measure, since it
> involves much less extrapolation. See
>
> http://en.wikipedia.org/wiki/Gross_domestic_product
>
> for an intro on all this.)
>
> Also:
>
> Go to Google and enter
>
> "The Effects of Government Expenditures and
> Revenues on the Economy and Economic Well-Being:A Cross-National Analysis" pdf
>
> with the term "pdf" outside of the quotation marks. From the pdf file
> we see the following:
>
> Quote:
>
> "Among the 21 OECD countries, the United States has the fourth
> smallest public sector, with total government (federal, state, and
> local) expenditures amounting to 37% of gross domestic product (GDP).
> Total government spending accounted for
> 34% of GDP (the smallest) in Ireland and 59% of GDP (the largest) in
> Sweden. Countries with larger government spending relative to GDP tend
> to have higher productivity growth rates and lower relative poverty
> rates. There appears, however, to be no relation between government
> spending and GDP growth. [Note: This is GDP growth, not absolute
> per-capita GDP, which is looked at in the above comparisons with the
> above lists.]
>
> Public social welfare expenditures are the benefits paid by all levels
> of government providing support to maintain welfare. The level of
> social welfare spending varies from country to country - the
> market-oriented English-speaking countries such as the United States
> tend to have social welfare expenditures equal to about 15% of GDP,
> whereas the welfare-state Scandinavian countries spend much more,
> typically about 25% of GDP. The evidence suggests that public social
> welfare expenditures do not have an adverse effect on the economy. But
> these expenditures can improve economic well-being - countries with
> higher public social welfare expenditures relative to GDP have lower
> relative poverty rates."
>
> Now in light of all this see the following on Norway's world-beating prosperity:
>
> "Moral economics -> world's highest living standard and greatest
> happiness"
> http://mathforum.org/kb/thread.jspa?messageID=7633652&tstart=0
>
> On Fri, Sep 7, 2012 at 12:26 PM, Robert Hansen <bob@rsccore.com> wrote:

>> So where does the money come from? Trees?
>>
>> Bob Hansen
>>
>> On Sep 7, 2012, at 11:38 AM, Paul Tanner <upprho@gmail.com> wrote:
>>
>> This idea that socialist/capitalist Norway is as rich as they are only
>> because they "have lots more oil and gas than we do" is just yet
>> another myth made up by conservatives to try to explain away how
>> economic conservatism is being proved by the facts to be all wrong.




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