What do you mean no Helicopters and McNukes?

In usual fashion I have come across some inspiring material to write my own article on. I’ve been thinking recently about what the ends of a libertarian party or movement would or should be. In this blog I consider the means of getting there. I’m always pushing steps toward a libertarian society. These steps seem to never make any progress. I have always viewed the libertarian society as an idealist notion. I think to some degree its true. On the other hand, I feel like its entirely possible that a libertarian society is achievable. The problems are numerous and the solutions are few. One main problem and probably the biggest one is the lack of education of outsiders on the libertarian values and beliefs. People tend to misinterpret or misunderstand what libertarians stand for and what we want to achieve.

I’ve recently said on social media that I believe I’m in the minority of libertarians that believe that achieving the ultimate goal of a libertarian society will come instantly once it happens. I feel that many libertarians, anarchists, anarcho-capitalists think that once we overthrow the current government then we can just easily transition to that libertarian society that we all agree is the goal. I don’t believe its so easy or fast. I think there is a number of factors to consider about means and ends of libertarianism.

The first and foremost is that the way to change the government is to vote for politicians who hold the same beliefs, values and morals as libertarians.  We can all agree politicians of this caliber don’t exist right now with the exception of Rand Paul, maybe. After voting for Gary Johnson in two consecutive elections I have realized that we are going too big. (Nothing wrong with him, just a walking meme.) We need to find libertarian congresspeople. I know of 3 libertarian leaning congresspeople, Rand Paul, Thomas Massie, and Justin Amash. Once we can turn the Congress into a majority of libertarians then we can work on the white house.

The second factor is education like I mentioned before. A lot of people have misconceptions of libertarians. Even I used to subscribe to these common myths. For example: Libertarians are both Republican and Democrat because they support a little of each. It might be true that we hold similar positions but we are actually against both parties. The two main parties are a snake with two heads. They don’t care about you. They care about their interests and their money! We need to educate the masses on libertarianism. The essential thing is liberty and freedom. The government shouldn’t play much if any role in our everyday lives. The government doesn’t need to over regulate and get involved in everything we do. The government doesn’t need to tax our hard earned income. For over 100 years, the US government collected no income tax. Who will build the roads? Private corporations that need to ship things by truck. Businesses that need to drive around. My point is that if we can educate people then eventually will lead to more people accepting and more importantly voting for libertarians.

The third factor of the means is simply cohesive-ness among libertarians. We have to unify our ideas. I know we all agree on certain things. But we have to compromise on other things. Example: Abortion. One of the hottest button issues because there is no stasis for argument. Pro Life or Pro Choice? For me, I’m torn between both because choice is guaranteed by the 14th amendment. Yet I’m also catholic so I can’t possibly support the killing of something that is alive. My position is Pro-Adoption. It gives a choice and saves the life of the baby. Also there are many parents out there who can’t have kids. My point here is that a compromise takes a little bit from each side and makes palatable to everyone. Compromise is something that our country was founded on. I strongly believe we should get back to that.

The forth factor is concerning the ends. I find it hilarious but helicopters and McNukes are a standard must have in any libertarian society. But lets all be honest its a little far fetched. I do believe that no taxes, open carry (guns), NAP and very small government are possible to have. I think we all have to be realistic about the ends. The ultimate goal is for everybody to live their life without the interference from government. But I think we miss the point that libertarian is also one of the most charitable types of societies. Its not fake charity like socialism and communism. In a libertarian society, you would give to the poor, give to the sick and give to government if you felt like it was worth it. Thats the wonderful thing about it, its your choice to give your money or not. Government is ineffective at helping people. But there is a million examples of where everyday people throw their support at something and get it done without government.

My conclusion is that we need to educate, vote, come together and be realistic about our ultimate goal of a libertarian society.  We can do it all once too. My inspiration was an article that basically said no more Libertarian party but we need a movement. In order to achieve a movement, we have to educate people on the benefits of joining this movement. We have to vote in politicians who reflect our positions. Its not going to be easy. The steps towards a libertarian society will be methodical. All I hope is that I see this libertarian society come to fruition before my time is up. I’m still young so I got hope.

Just remember kids, Taxation is Theft.

Thanks For Reading!

 

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On the Basis of Democracy: John Locke, Part 2.

Welcome to Part 2 of on the Basis of Democracy with John Locke. If you missed Part 1, you should read that first. The purpose of this blog post is to simply figured out the origins of Democracy and how it works within our American democracy. In Part 1, I went over some of the ideas of democracy from Aristotle. Political theory is a pretty easy theory to follow because each political philosopher usually builds off philosopher’s of time past. Therefore, the more ancient political scholarship you understand, the more modern/current political thoughts you can understand. In Part 2, we will be discussing John Locke and his ideas on democracy.

Who is John Locke? He is an english born political philosopher. Born in the early 1600s. He was influenced by Aristotle. Locke has a deep range of writings. He is often considered to be one of the fathers of the enlightenment. Similar to part 1, I won’t give a full biography but go to straight to Locke’s ideas about democracy. Starting from his first writing and going forward, Locke’s main premise is the consent of the governed. In his first writing called “Fundamental Constitutions of Carolina”.  In this piece, Locke and his mentor, wrote a constitution meant for the Providence of Carolina in England. It was never adopted. However, the ideas that he mentioned became the basis of political philosophy going forward.

The most influential of Locke’s writings came in his Two Treatises of Government. Instead of trying to paraphrase his great words, I will just show you. Then I will explain how the founding fathers use Locke’s ideas especially in the Declaration of Independence. Here is just a few excerpts of Locke’s Two Treatises of Government:

Sect. 95. MEN being, as has been said, by nature, all free, equal, and independent, no one can be put out of this estate, and subjected to the political power of another, without his own consent. The only way whereby any one divests himself of his natural liberty, and puts on the bonds of civil society, is by agreeing with other men to join and unite into a community for their comfortable, safe, and peaceable living one amongst another, in a secure enjoyment of their properties, and a greater security against any, that are not of it. This any number of men may do, because it injures not the freedom of the rest; they are left as they were in the liberty of the state of nature. When any number of men have so consented to make one community or government, they are thereby presently incorporated, and make one body politic, wherein the majority have a right to act and conclude the rest.

Sect. 96. For when any number of men have, by the consent of every individual, made a community, they have thereby made that community one body, with a power to act as one body, which is only by the will and determination of the majority: for that which acts any community, being only the consent of the individuals of it, and it being necessary to that which is one body to move one way; it is necessary the body should move that way whither the greater force carries it, which is the consent of the majority: or else it is impossible it should act or continue one body, one community, which the consent of every individual that united into it, agreed that it should; and so every one is bound by that consent to be concluded by the majority. And therefore we see, that in assemblies, impowered to act by positive laws, where no number is set by that positive law which impowers them, the act of the majority passes for the act of the whole, and of course determines, as having, by the law of nature and reason, the power of the whole.

If you want to read more of Locke: Click here.

Locke’s main point is that the governed hold the power of the government. Locke believes that a government cannot operate without the consent of the government. This is a basis of democracy. The reason why Locke believes that the consent of the governed is so important is because of the freedom or liberty that it offers. If the government is ruled by the people it can prevent tyrants and better rule the people. Locke is also coming from a monarchy in England and in a time when the dark ages we’re not that far off. In the dark ages, it was a small oligarchy who wealthy that ruled over the poor and working class who had no say. Locke’s ideas are perhaps best expressed in Thomas Jefferson’s document.

Thomas Jefferson was a philosopher in his own right. Jefferson also understood that Locke’s philosophy fit perfectly with the American cause for revolution. If you didn’t pay attention in history class then you want to know to that one of the rallying cries was “no taxation no representation”. The American people were clamoring for representation in the British parliament. The unilateral rule of the British Monarchy over the American colony was directly what John Locke was trying to get at. In the Declaration of Independence, Thomas Jefferson took a page for Locke and wrote this:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Thomas Jefferson essentially took Locke’s words and used it as a justification for the revolution of the American people. Locke’s vision for democracy did not just end with Jefferson but kept going. Locke’s idea that the consent of governed is needed in democracy still holds true today. Unfortunately, in today’s America we have gotten lazy. We seem to have ignored the fact that our democracy is supposed represent the people. Many people blame our representatives. We should look at the majority of governed who don’t vote. I think in a very indirect way, Locke is also advocating for participation in government. I feel that political participation has gone down as politics has become more polarizing.

We can blame Trump. We can blame Hillary. We blame our politicans. However, I think that democracy in the words of Locke lies with “the consent of the governed.” I think to wrap up this series, I want to just conclude a few major considerations for the basis of democracy. One basis that Aristotle outlined is the authority over aduits. In other words, Aristotle thought that the people should hold purse strings and keep the government accountable. Aristotle gave us a second basis that is the foundation of our judicial system. The right to a fair trial with a jury of your peers. Locke gives us the basis of the consent of the governed. The theory that democracy should always be run by the people and for the people. The majority of people should have the power to control the government. This means everyone must vote. Everyone must participate. These are the three main bases of democracy as written by Aristotle and John Locke.

This will be end of this series for now. I may continue it with different philosophers at another time. Below you will find my sources especially for the quoted stuff. Thank you for reading!

Citations:

https://www.johnlocke.org/about-john-locke/who-is-john-locke/

http://www.gutenberg.org/files/7370/7370-h/7370-h.htm

http://www.ushistory.org/declaration/document/

 

 

 

The Argument for the Electoral College

Since the election of Donald Trump, there has been an unprecedented amount of media coverage and debate surrounding the Electoral College. I have not been even slightly swayed by any of these opinions and arguments. I think as a student of history having read parts of the classics like Aristotle and Adam Smith; add to that the reading biographies of influential founding fathers. A student of history knows that the founding fathers read and studied all the classics. The prevailing ideas of the day were based on the enlightenment movement starting in Europe and spreading throughout the world. It was truly a renaissance of ideas that transformed governments. Now we are here about 227 years of democracy later and people are suddenly up in arms about the electoral college? I want to defend the Electoral college as a necessary and proper institution in the American representative democracy. I think the term ‘representative’ is the most important word that validates the Electoral College. My opening salvo can be summarized as the blame game of the system that has worked over 200 years with approximately 56 elections taking place.

My first argument is to say that why must we blame the electoral college? Why is it not the candidates that we picked? The system is merely in place to keep the election fair and offset any disadvantages that typically plague a representative democracy. The two candidates that we’re voted in the primary to run in the presidential election, were by far the most despicable candidates in history. Both of them polarizing. One candidate had 30 years of public office experience with multiple scandals, corruption, and mistakes. The other candidate is an international businessman who went through multiple bankruptcies. He was a television reality star. During the campaign became well-known for vulgar statements about different races and the opposite sex. These unlikable candidates were the only ones who had a shot to win. So why is the electoral college the fault for electing Donald Trump? That brings me to my first argument for the Electoral college.The bad candidates has to make one wonder if it’s actually the electorate that is at fault for putting up the two worst candidates in history. We must remember that the people or the citizens of the United States are in charge of voting for the candidates in the primaries. The primaries can be rigged like the DNC did, however, in an honesty primary you would think the electorate would vote out the bad candidates? Hence, my first argument is essentially this: The founding fathers installed the electoral college because they didn’t feel that the voting  populace could effectively elect the right leaders.

The original source of this argument is from the Federalist Papers. If you paid attention in history class or if you have been reading this blog you probably know about the Federalist Papers. If you don’t then please look it up. The specific number was Federalist paper 68. Federalist paper 68 was written by none other than Alexander Hamilton. In no uncertain terms, Hamilton argues that the President and Vice President should have a ‘small number of persons, selected by their fellow-citizens from the general mass, will be most likely to possess the information and discernment requisite to such complicated investigations’. The translation of that old English is that Hamilton believes its necessary that a small group would choose as a surrogates to make the final decision on the election of the President and Vice President. He even goes on to say this about who the Electoral college will made up of: “No Senator, representative or other person holding a place of trust or profit under the United States“. Hamilton believes the electoral college can prevent corruption because of these stipulations. Hamilton keeps repeating his argument and each time it gets clearer. This line that Hamilton writes at the beginning of the 8th indentation, is exactly why the Electoral college exists today.

The process of election affords a moral certainty, that the office of President will never fall to the lot of any man who is not in an eminent degree endowed with the requisite qualifications.

I  would strongly encourage you read the whole Federalist Paper 68 because Hamilton is a master of his craft and gives a very persuasive argument.

My second argument is based on  previous Supreme Court cases that have been decided in favor of the Electoral College. The last time a candidate won a popular vote and lost the electoral college vote was George W. Bush vs. Albert Gore. The case happened over a just few days in early December 2000. However, it was not the first case about the Electoral College. The issue that is typically argued in the Supreme Court is over the 14th amendment. The specific clause in this case is the equal protection clause. The equal protection clause simply protects all people under the law within its jurisdiction. This means that you can’t make law that excludes a specific type of person based on sex, religion, gender, etc;etc. The equal protection clause also includes voting laws and vote counting laws. The first case on how states count their votes and tally it up for the electoral votes was McPherson vs Blacker. In this case, Michigan’s legislature wanted to change the way it calculated it votes for the electoral college. The Supreme Court ruled that the constitution gives the power of the legislatures to choose how electors are counted based on the popular vote. The constitution says the legislatures have power to decide in the second article. It was later expanded by the 14th amendment. In the Bush vs. Gore case it was over the re-count of the vote processes by county or district in Florida. If you recall the election of 2000 was too close to call because of Florida and their ‘hanging chads’. The controversy came from the fact that recount policies were different but the court didn’t find that the equal protection clause was being broken. The reason is that the Florida legislature had let the rules vary by county and district. Granted, Supreme court cases can be overturned. However, the point here is that the laws within our constitution and amendments actually do protect us from any sort corruption or problem that is purely systematic.

My last argument is one of simple logic. I have now presented two legitimizing reasons for the Electoral College. Here’s is my third one, that also doubles as a challenge to those nay-sayers. Let’s say we want to get rid of the Electoral College because it is not perfect by any means. What would you replace it with? My third argument is simply that I truly don’t think that the citizens of the United States would like the replacement. The replacement would be a similar system to almost every European and every other democracy or republic in the world. We would have to discard our two-party system. We would have to allow multiples of candidates on the ballot . The system that we would change to is called a “single vote majority” or a “plurality vote”. This means that the candidate with the largest majority of the vote would win. Straight up. In the case of this election between Clinton and Trump, neither of them would have won. We would have to have a re-vote. There was only three candidates in every state ballot for president. Clinton had 47 percent, Trump had 46, Johnson had 3 percent and Stein had 1 percent. The other 3 percent was for Harambe or Bernie I assume. Depending on the rules, the winner would either have to have 51 percent in our current system with two main candidates. If there was more than 2 candidates, then the winner would be the person who takes the most, in that case it would be a Hillary Clinton victory. It would certainly invite a wider range of candidates. I think its pretty stupid to ask for majority vote when reality is that this specific election might have had a different outcome with a majority vote. This doesn’t mean the future elections won’t also be negative outcomes with a majority vote. If another candidate similar to Trump comes along after getting rid of the Electoral College then we are at the mercy of majority. It’s odd that many of the same people who want to get rid of the Electoral College are in the minority. (Very strange to me?)

To wrap up my post and conclude my point, I want to finish my arguments by saying that the Electoral College actually levels the playing field in every election. The electoral college makes sure that every voice is heard. The states with the higher electoral votes are more populated, like California, New York, Florida, Texas, Ohio, Pennsylvania and Virginia. The states with the lower electoral votes are less populated and it’s not surprising that there is more of them. I believe that if you think population shouldn’t matter then you probably don’t understand urbanization. America used to be a farming society and it has transitioned into a mostly urban society. The cities on each of the coasts and elsewhere hold nearly 50 percent of the United States populace.You can almost guarantee whoever the cities vote for will have a chance to win. If in the off-chance like this  year and in 2000, you can get a coalition of rural states and a few swing states to change color, that is when you get a President Trump. Let’s face the facts the electoral college isn’t to blame for Trump. Remember that Trump was elected in the primary. Trump was basically allowed the majority of Republican and non-Republican voters alike to run for President. If nothing else, Trump used the electoral college to his advantage better than Hillary. I could easily argue that Hillary had an easier path to victory. All she had to do was win either Ohio or Florida plus two other states like Michigan and Pennsylvania. Her coalition of Democrat states includes two of the biggest in New York and California.

So please next time you want to blame the Electoral College, don’t blame the system that was put in place and has worked for 227 years. Look at the voters, look at yourself. People vote for the president. People are responsible for the candidates that are put up to run for office. Thank you for reading and I hope this helps people understand why the Electoral College is necessary and proper!

“Though we cannot acquiesce in the political heresy of the poet who says: For forms of government let fools contest That which is best administered is best,” yet we may safely pronounce, that the true test of a good government is its aptitude and tendency to produce a good administration.” — Alexander Hamilton, Federalist 68

Citations:

Quotes From Sources in Bold or Italics.

Hamilton, Alexander. Federalist Paper 68: Mode of Electing the President, March 14th 1788. Lillian Goldman Law Library, 2008. Link Here

Denniston, Lyle. Constitution Check: Is winner take all Electoral College Voting in trouble?, Constitution Center. January 29, 2013. Link Here

Cornell University Law: Legal Information Institute: Bush vs. Gore, Supreme Court. December, 2000 Link Here

The featured picture is the electoral map of the US for the 2016 Election. The red represents where Trump won. The blue represents where Hillary won. Trump won mostly rural areas meanwhile Hillary won mostly urban. Population does matter.

Donald Trump Wins. America Reacts.

This post will be relatively short because I just want to share my thoughts that I already expressed via Facebook. In addition, I want to say that I never really guessed right but I think that the News Media Party was a big factor in Trump’s victory. I think that maybe there is a few articles to come from this Facebook post that I wrote today.

I have refrained from stating my political opinions until now. I wanted to see what everyone’s else reaction would be. Now that I have seen it, I have a few thoughts. To start off, I voted for Gary Johnson and it was a vote of conscious not against anybody but FOR Gary Johnson. I will not defend Trump nor Clinton. What I would like to share is something that it seems many people do not understand. The Electoral College seems to blamed for Trump’s nomination and Clinton’s loss. Many people think this because Clinton won the popular vote. However, I have two big problems with this type of sentiment. My first problem is America is not a populist democracy. In most Europe and some Asian countries like the Philippines, they use a plurality voting democracy. This means each candidate has their votes tallied and the one with the biggest majority is the winner. America has a representative democracy meaning that voters vote for representatives. The representatives of the government are citizens which is why its for the people and by the people. My second problem is in two parts. First, the electoral college was created for a reason. The founding fathers weren’t trying to create a Donald Trump scenario. They were trying to protect the citizens (white land owning men) from their own stupidity. I believe this is smart. It is often held that an educated voter will elect a better politician. I think we can all agree that most of America is not educated enough on politics and to some degree at all. Second, the electoral college has some fishy rules. But its concept and principle is sound. Cities often vote Democrat. Rural place often vote Republican. There are exceptions. Cities have more population than rural areas. To go even bigger, states have different populations. California has 40 million people meanwhile Wyoming has 500,000. Its would be fair to the smaller states to always the big state interests put first. The founding fathers spent more time on this issue in the constitution convention then many others…even for the Congress. How the electoral college works is that it awards electoral votes based on population. For example California has 55 electoral votes and Wyoming has 3. It fair because if California votes one way and a few smaller midwest states vote the other way, it makes a fair voice. Also to those people that are scared of Trump, Rhetoric is often used to get votes. Typically a President never lives up to their campaign promises. Also politicians lie and Trump is no different. We all need to relax and let the government do its job. Let our constitution of checks and balances maintain our liberty no matter what Trump tries to do. Last thing, 120 million or so people did not vote! Being silent is making a statement. Its probably a statement you don’t want. So next election urge everyone you can to vote. Not voting, not caring or caring about the wrong things in politics is why Donald Trump has been chosen. Stop blaming third parties. Stop blaming the electoral college. Start doing something about it, write letters, emails, protest in a peaceful way. Dissent is a beautiful thing. Thank you.

I truly believe that people need to better understand how our government was set up and how the electoral college works. I have written another on the electoral college in the past. This Facebook covers a variety of topics that I have written about on this blog. Now the reason why I haven’t made a post in awhile is because this election has gotten away from the true politics. It became a horrid mess of personality smearing and attacks. Now with the election over, I will start to write again about President-Elect Trump and his policies going forward. I will also write more about constitutional and governmental issues. I am hoping to educate so that next election, we will be equip to elect better politicians. We can do better than Trump.

If you have any ideas or suggestions, drop me a line: garrett_smith12@yahoo.com

Thanks for reading! Have a great day!

Economic Series Part 3: What is Gross Domestic Product?

Welcome to the third part of my economic series. This final part will explain what GDP is and why it is so often used as politicians go to economic figure of success or failure. Gross Domestic Product or GDP as I will call it by the acronym, is an economic indicator. It measures a very specific part of the economy in any given country. If you have not read parts ONE and TWO of this economic series I strongly suggest that you do. My first two parts of the series describe the arguments for and against minimum wage in part one. In part two, I  go over the basics of government budget and taxation. It’s important to recognize that economics is a very complex subject and many topics involved having an understanding of other topics. In this case, I think that GDP is definitely the most advanced of all the topics that I have covered thus far. In order to properly discuss GDP and the politics that usually surround it, I feel its necessary to explain how it come to be and what it involves.

The book that has inspired me to write on this topic and my primary source of information is called GDP: A Brief but Affectionate History by Diane Coyle. Coyle’s book gives a full rundown of everything GDP. I would strongly recommend it because this post won’t even cover 1/4 of what she does in this book. Coyle gives a simple word breakdown of GDP. Gross meaning not deducted as opposed to net (Her example was like net weight of a cereal box, it’s only the weight of the cereal without the packaging) Product meaning stuff made, and Domestic is simply at home.(Page 7) GDP is much more complex than the three simple words that make up its name. The history and founding of GDP begins at the start of World War II. However, the idea goes back throughout the ages.

One of the many controversies over GDP that still exist today was first explored by one of the greatest economic scholars to ever write. Adam Smith wrote the Wealth of Nations. In his book, he went over some relevent facts of GDP. His point to paraphrase is this: The manufacturer that produces something with their labor creates value and adds it to the economy. The person who employs many menial servants grows poor while the person who employs many manufacturers grows rich. The point here being that Smith sees the production of goods as adding value to an economy. He sees the services of a servant or a service in general adds nothing. GDP has often not included services because it’s too hard to measure the true output of a teacher. Also the word “Product” in GDP lends itself to the production of goods not services. (Page 10)

GDP’s history comes out of collection of statistical data and economists. Colin Clark calculated the expenditures and national income of the United Kingdom. Clark based his work on a publication by Alfred Marshall who wrote Principals of Economics before the Great Depression. Franklin Roosevelt encourage more research and work on the national income and expenditures during the Great Depression. This led to Simon Kuznets to work with the National Bureau of Economic Research, which earned him a nobel prize. One of things that Kuznets brought up is an important facet of GDP. Kuznets thought that he was working to measure welfare rather than just output. GDP is often used to measure the welfare of any given country. However, because like I said previously, GDP is typically measured by the output of an economic. The problem of welfare and GDP is one of modern criticisms of GDP. Coyle dedicates two chapters to the subject of GDP and welfare. (Page 12-14)

I want to focus more on the particulars of GDP and how it’s calculated. Coyle covers this topic quite well. I want to save welfare and GDP for another post because it’s too much for this post. Coyle goes over the three different ways to measure and calculate GDP. She gives a two charts. One chart shows how these calculations are done. Since I don’t have the chart, I will just describe each way. The first way is a Value Added production. Value Added production adds up the Gross Output. The gross output is the all the sales made in an economy. The gross output excludes the inventory because it’s counted by the next category of intermediate inputs. Which stuff like staffing, inventory, and other things that businesses pay money for to make their business work. Finally you get to a number that tells you how much value added each industry in an economy.

The second way to calculate GDP is through Income (by type) approach. This approach uses a set of different incomes and expenditures to make final figure of Total Domestic Incomes earned. There are rental income, profits and proprietors’ income, Taxes on production and imports, Less: Subsidies, Interest and miscellaneous payments, and depreciation. These are the categories of the Income (by type) approach. The third way to calculate GDP is through Final Demand (or Expenditures) approach. This approach uses the sum of these categories to make up the final sales of domestic product to purchasers. The categories are the consumption of final goods and services by households; Investment in plant, equipment, and software; Government expenditures on good and services; and net exports of goods and services (export-import). No matter how you calculate GDP, the measurement always is trying measure how much an economy produces and what kind of income the country who benefits from it makes. (Page 25-26)

The most popular and most used method in modern times is the Expenditures approach. Coyle also goes over the equation along with an awesome chart. The equation simply is GDP= C+I+G+(X-M). The letters stand for Consumer Spending plus Investment plus government spending plus exports less imports. (Trade deficit/surplus). Coyle also tries to show some problems with the GDP equation which is mostly that GDP is not so simple. The categories have multiple sub-categories. There is a lot of gray area. The numbers can be shaky. However, in the end GDP is the most reliable measurement of economy. Coyle mentions other indicators which can help round out the welfare aspect and government impact. The awesome chart I was referring is a two circles. On the left side there is the word “Individuals” and on the right side there is “Business”. The top of the circles, have two words. On the bottom circle it says Expenditures, and on the top circle it says Goods and Services. In the lower two circles, the top one says Income and the bottom says Labor. (page 26-27)

The story is that Individuals and Businesses interact in two different ways. The circles represent the different ways. The bigger circle with Labor and Goods and Services basically shows that Individuals supply the labor for business. The Business supplies the good and services. This is basic economics, it shows a supply/demand for labor and good and services.  The smaller circle with Expenditures and Income show that Businesses supply the Individual with income and the Individual supplies the business with Expenditures. The vice-versa is also true. Businesses make income on the Individual’s expenditures. This is a simple economics lesson that can help you understand GDP. (Page 27)

GDP is an important facet of economic measurement of any given country. As Coyle notes in later chapters which this post won’t cover, that GDP is not accurate in second and third world countries because of faulty accounting and statistics. She also covers a great deal of debate over whether welfare should be measured by GDP or not. These are more complex questions than I really want to go. I think the point of this post is to say that GDP is important to understand. GDP is not a true measure of welfare. It’s the statistical measure of economic input and output. As an example, GDP measures the number of phones that Apple sells after the release of the Iphone 7. It doesn’t take into account the welfare of the people who buy those phones. GDP is also a political tool especially when it comes to arguing over the economy.

Moving away from Coyle’s book in some ways, I want to briefly discuss why politicians like to use GDP. I think that much of the political controversy surrounding the use of GDP comes from the myths of GDP. Many people don’t realize the history of GDP. The misunderstanding of what GDP represents. Many politicans including present candidates for President seem to think that GDP shows how well the economy doing or more often how bad it’s doing. However, the reality is that GDP can fluctuate just based on how you calculate it. One increase or decrease in any given category there could be a 1-2 percent fluctuation. Another important myth to dispel is that government spending actually helps GDP. The debate that surrounds government spending and its effect on the economy is prevalent.

This is where I want to end this post and this series for now. My last words is that government spending doesn’t necessary make for the best economic move. The problem with government spending is that the government is NOT a business. Government makes their money from taxpayers. Its mandatory, you can’t just not pay taxes. It also makes a problem with counting the statistics for GDP. The government doesn’t have a real income with the exception taxes. This means that when the government tries to invest in anything it only represents an expenditure. If you recall the chart, the point of an economy is a cycle of labor into good and services that make income provided by expenditures. One example, that I know the best is that of the spending on the military. Military spending has often been one of the biggest items on US government budget. The national debt is nearly 20 trillion dollars. Some scholars have estimated that 16 trillion of that was spent during the cold war on military research and wars. The way that the DOD (Department of Defense) and the government have gone about spending this money is the problem. The military contracts assigned to military contractors during these years were given without little scrutiny. Many of the biggest contractors were able to contracts with no competition. The contracts included very little accountability or responsiblity especially in regards to money spent.

The point being is that GDP has actually suffered since the Cold War. This mainly due to stagnant economy. I mentioned that GDP doesn’t measure services which now is the most prominent feature of our economy. The reckless spending and bad fiscal policy by the government has given us some unfortunate consequences. GDP will always be controversial because of its complexity. I believe that its important to understand how GDP works. If you understand economics and GDP then you can understand that fallacy that politicians try to push on us. For me, this topic is fairly new but I wanted to try to introduce a little bit of the controversy and facts of economics and GDP.

Thanks you for reading! Have a great day!

 

Citation:

Coyle, Diane. GDP: A Brief but Affectionate History. Prinction University Press, 2014. 

 

Economic Series Part 2: Government Budget: Taxation and Spending

The most dreaded time of year is when everyone must file their taxes. Taxes are certain like death. Taxes are a necessary evil. To many people it seems that our taxes do very little for our own interests. Taxes are supposed to help the people who pay them but rather they seem to help special interests or people who don’t pay them. The responsible party of handing our taxes is the government. The IRS is the collector, Congress is the spender. I believe that this Economic Series Part 2 is probably one of the more important topics. This part will be a sort of contextual background for the last part of this series on GDP. (Gross Domestic Product) I think its very important to understand how the government balances or fails to balance the budget. The topic I choose is quite broad. However, I want to focus on why taxes are collected and how they are spent. I also want to point out how the national debt is growing and what we might do to stop it.

My own view on government taxation and spending is very much libertarian. I believe the government should spend as little as possible. This way our taxes are not the burden they have become. Government spending tends to go to ineffective programs and usually becomes wasteful. I think the best way to understand the federal government budget is by understanding some of the history behind. The creation of our federal budget and tax system was mostly implemented by one man. Alexander Hamilton is the responsible person for most our budget system.  If you remember from history class there was a lot of rebellion and distrust among the citizens of our new country. Many of Hamilton’s critics thought he wanted to become a pawn of the British or king of America through a tight relationship with England. Luckily for us, Hamilton’s set up turned out to be brilliant, and was kept in place until now.

One of the first ways that Hamilton helped set up the federal budget was by creating an import and customs service. It was necessary because when Hamilton became the secretary of treasury, the US had a war debt due to the revolution. In order to pay this war debt off, Hamilton created what is now the Coast Guard. He also set up customs and import agents along the ports. These agents were to collect the duties on the imports to America. The duties or tariffs were basically a tax on imported goods. This was the main source of income for the federal government after the Revolution. Another piece of the system that Hamilton created was the banking system. Hamilton realized that the US need a national bank. In part because of the debt and in part because of the wide range of currencies that existed among the former colonies. The Bank of America (similar to the one we have now) was created. Congress wrote a charter for it and it opened up by selling shares. These shares is how the bank made its money. The controversy came when it lead a lot money speculating among men who wanted to risk an investment in the bank.

The Bank of America also set up a line of credit for the federal government. This is was necessary because in order to pay back the war debt the US would need to take out a loan. Hence this created what we call credit. Hamilton’s system was much criticized by Republicans like Thomas Jefferson and Aaron Burr. One of Hamilton’s primary supporters was actually George Washington. With increasing responsibility due to the growing population and turmoil in France, the US needed to increase its revenue. Hamilton proposed and got a whiskey tax passed. This whiskey tax would put a small tax on whiskey and liquor. This lead to the Whiskey Rebellion in western Pennsylvania. Hamilton himself lead a rather big militia to help quell this protest.

Hamilton’s role in the banking, budget and tax collection in the US is monumental. It is often forgotten that he nearly created the whole system by himself. An impressive feat. It wasn’t until the 16th amendment that make income tax a thing in the US. This was passed in 1913 long after Hamilton’s death. Woodrow Wilson brought us into the modern era of taxes with the 16th amendment and the Federal Reserve Act. The Federal Reverse Act created the Fed as its usually called. The Federal Reserve Act basically moderates the US dollar according to the economic conditions. It also prints and controls the US dollar. Unfortunately, the Federal Reserve is mostly privatized. You may have heard the phrase “Audit the Fed” from politicians like Rand and Ron Paul. The problem is essentially, the Fed is undermining the US dollar and devaluing it. The Fed has its own agenda and nobody except the Fed knows what that agenda is. (Another post, another day)

Now in 2016, after over 200 years running our government, we find ourselves in 19 trillion-dollar debt. What could have gone wrong since Hamilton? The answer is hard to pinpoint. However, my working theory is that after War World 2, during the cold war, we started to spend more and more on defense. Defense spending became out of control and the Department of Defense was not held accountable. The DoD was allowed to “cook the books” on their budget numbers. Some estimates that I’ve seen put our spending during the Cold War at 16 trillion dollars. I would encourage you to check the national debt clock that shows our debt in real-time. It breaks down the debt into categories. The national debt being so high is due to overzealous spending and lack of accountability in the government.

As for a breakdown in spending and what we spend our tax money on. I found a nice infographic that shows how we spend our federal budget. It focuses on how the debt is effected by certain factors like raising and lowering taxes. You should definitely check it out right now. It’s from the Congressional Budget Office, a government agency. I think that paying taxes is obviously important however, I believe that some of our tax dollars are wasted. One of things that needs to happen is for the federal government to cut spending. Unfortunately, we don’t hold our government accountable for the money that it spends. A good analogy is like when you take your parents credit card and go on shopping spree. Your parents may give you the credit card with a reasonable expectation of what you will be spending it on.  Instead though, you spend it without any kind regard for how much or on what. Imagine if your parents never held you accountable for spending all their money. They would probably go bankrupt in most cases because without restrictions, then what’s the point of spending less?

This is how the federal government and taxpayer relationship basically works. The federal government is you as teenager with a parent’s credit card. The taxpayers are the parents. As taxpayers we are pretty irresponsible parents. We don’t hold our government accountable for their actions in spending money. The tragedy is that the US is in big trouble because of reckless government spending. The 19 trillion-dollar deficit is almost an insurmountable sum of money. Rather than discussing who is to blame for the problem, I think its more productive to discuss how to remedy it. The blame can be distributed to many people and government agencies. The blame can be put on US foreign policy too. However, there is a relatively easy and pain-free way to help cut the deficit and still keep our standard of living intact without raising taxes sky-high.

There are two primary solutions that I feel would work to greatly reduce our debt. One of those is a simple cut in unecesary government programs and spending. One of our biggest expenses is the military budget as you can see below:2016-budget-chart-total-spending2

So just imagine if we pulled back most of military troops from abroad and cut most of the unecessary research and development budet. I would only cut about half of the military budget. At nearly 634 billion dollars, let’s cut it down to 300 billion. The 300 billion left for the military would go towards the salaries of personnel mostly and all the war material necessary. In the case of an attack on us or our allies, then obviously the money could be restored. So where would that 334 billion that I cut off go to?

Take a look at the pie chart again. 60 precent of our budget is spend on healthcare and social security. Social Security, by the way is going bankrupt. So let’s put 334 billion into both of those. Approximately 150 billion to each service. In addtion, lets cut off the foreign aid to other countries and add another 30 billion to the pot. So imagine over eight years during just one president for two terms, with approximately 165 billion dollars going to sinking welfare programs. So in 8 years, the US would put nearly 2.6 trillion dollars into those welfare programs. You could even take a step further, take about 2 billion or 3 billion out of the 364 billion and put that into higher education. You could pay off the loans of all students each year. Just think about all this, this is just cutting the military budget by half. Which by the way, is nearly 10 times as big as the next country’s military budget.

My other option, which I have written about before and have over time, really have come to like is Basic Income. You should definitely read my post on Basic Income. I will explain in short, that Basic Income is basically a replacement for welfare. You cut all social programs including medicare and medicaid. Cut minimum wage. Cut everything related to social security.  Instead you give everyone over the age of 18 a check from the government for a certain amount each month. Now just imagine if we did as I describe in my basic income post and we cut the military budget. I truly believe that the effect of both of these actions could lower taxes and help eliminate the deficit.

The taxation and government budget problems are ones of responsibility and accountability. This in part comes from the lack of education how the taxes and spending work within the government. I hope that my brief explanation can help clear up some of the confusion and misunderstanding about how taxes and government budgets work. I mentioned that this series post prefaces my next topic of Gross Domestic Product. Its important to note that GDP is calculated without the input and outputs of the government. The government spending money on military war material and other research does not count towards GDP. This is a very significant fact in that it strongly affects the GDP numbers. As you will find out in my next post that GDP only measures the input of labor and the output of production by the private sector.

I would encourage you to research more outside of my post. Its a very interesting topic. Thank you for reading! Have a great day!

 

Breaking the Blogging Silence

You probably didn’t notice but I took a pretty long break from writing on this blog. Most of the reason for my absence was not a lack of material to write. It was more of a lack of time to write about it. I was experimenting with podcast and I may get back to that eventually in the future. As for the political news, there isn’t much new to write about. The general election is strangely one-sided. Donald Trump has quite literally defeated himself by going into off message tangents and make it easy for voters to not pick him. Meanwhile, Hillary Clinton of all people, is considered to be the lesser of two evils. The two candidates are both embattled with different shades of controversy. Hillary with her emails, and Trump with his bombastic commentary.

This post will be relatively short depending on how much I want to ramble on. This blog has been extremely focused on politics especially current events and happenings. I may still do some posts about that. I want to expand more into scholarly subjects. I want to discuss and try to solve problems in modern politics. I want to use my deep knowledge of history to help more people understand these problems. I have a lot of subjects that I want to go deeper into. I feel like there are subjects that I want to explore. One of those such areas is economics. Economics is not a subject that I studied heavily in either highschool or college. I sort of, taught myself about it. I took one college class on economics which gave me a basic understanding. Now I have been trying to read and research books that might help get even a better understanding.

The thing about economics is that it intersects with both history and politics. Much of the data collected on economic activity is from the past. The usefulness of economics in political debate and policy is based on this data. How you read the data and interpret it, is a big issue in political realms. I want to give you my readers an accurate interpretation of many subjects including economics, politics, civics, and history. I want to show how educating yourself on these subjects can be beneficial especially when it comes to election day. You will be able to weigh the candidates on something other than how they look, talk and how catchy their campaign slogan is.

In the future you can expect to see more posts, I hope if I can make time. Many of these new types of post will be a lot longer. I will most likely write them in a series covering one topic at a time. This blog is one of my favorite hobbies and unfortunately life has beckoned me to do other activities this past month or so. I can’t say it will be much better but I will attempt to commit even more time. In mean time, I would encourage you to look up Gary Johnson and consider giving him a shot. We have known and even scarier unknown qualities in Clinton and Trump, respectively. Think for yourself and make decisions based on logic and fairness.

I hope have the beginning of a new series starting as soon as this week but if not then definitely next week! Thank you for reading! Have a great day!