I’ve said it before, but I’m going to say it again: “Tax policy is Social policy”. In the 1970’s, there was a tax theory called the Laffer Theory. The Laffer theory basically states that there is one tax rate T that maximizes tax revenue. It was criticized by other economists as being too simplified and T is unknowable. Regardless, Reagan used it as part of his argument for lowering taxes.
With such a less than stellar resume, I still find it intuitively interesting, with some qualifications and explanations. The theory starts out simply. At a zero tax rate, you won’t collect any taxes and at a 100% tax rate you won’t collect any taxes because nobody will work. In between these extremes is an optimal tax rate T. First, I would substitute the word structure for rate. Any individual tax isn’t collected in a vacuum. We have many taxes from many authorities collected simultaneously. For this discussion, I would posit only those visible to the average taxpayer are relevant. I am going to limit my discussion to individual taxes because I have a different scenario in mind for corporate taxpayers. The T value for society is the sum of property, sales, state income, social security, medicare, and Federal income taxes. The key to the optimal T value is psychology, which will send most economists screaming into the night. Taxes can be adjusted upwards if the payer perceives increased value. This means additional taxes must be spent on things that are visible and direct benefit to the taxpayer. I believe we are well under the optimal T value. Also, the T value is a moving target. As we provide more tangible benefits from tax collection, the T value will increase.
The most obvious, to me, spending targets, visible to the electorate, are health care, social security benefits, and infrastructure. Moving down the list to climate change and education, I think these items will need a well thought out publicity campaign to help drive support for these issues. That doesn’t lessen their importance, it’s just a visibility thing.
My most basic premise in writing these essays is nothing takes place in a vacuum. If we have a healthy, educated electorate living in a safe environment, life would be so much better, and people would be willing to address new ideas and change. One can hope.
Make no mistake about it, economic chaos is coming. It will be caused by climate change and the growing subjugation of the lower classes by the elite. We do have options; we can control which parts of the economy it ravages and what the other side is going to look like.
This first thing we need to do to stop climate change is eliminate our dependence on fossil fuels. No amount of consumption is acceptable. The question becomes: what is going to happen to all the companies depending on the consumption of fossil fuels? The short answer is: I don’t care. Internal memos show they have been aware of the impending problem for forty years. There have been other credible forecasts going back to the early twentieth century. Instead of investing in their future, they have been aggressively buying back their shares and paying dividends If they don’t change their ways, they will fad away, just like the buggy whip industry. If we don’t solve climate change, in the process of becoming uninhabitable, there will be a lot of angry people fighting for survival.
Of course, one of the outfalls of eliminating fossil fuels will be a paradigm shift in how we get around. We will be much more dependent on public transportation, personal vehicles will be smaller and more practical, population will in many cases become more centralized. If we don’t make these adaptions, we will fail.
Healthcare reform WILL come. I’m not sure what form it will take, but it will be disruptive. How much is up to us and how we structure the transition. Think of all the insurance companies and claims processors that will no longer be needed. There will still be a need to process “paper” to prevent things like fraud. I saw some statistics a while back that stated claims processing by the government for Medicare averaged around 2-3% of the claim value while private insurance averaged around 17-18% of the claim value. There will be a lot of economic displacement during the transition. The difference between the two processing costs are resources that can be used elsewhere. This is another case of where I don’t feel sorry for the health insurance industry.
If we don’t do something to increase the living standards of the bottom 25% of our economy, there will likely be a peasant revolt(slave uprising). There are many things we can do to prevent this. I will go into my proposals on another day. Just saying it will be part of the economic chaos.
We need to plan for the changes coming. This won’t be done in a vacuum. There are many other factors to consider. Increased productivity due to advances in computer technology. Transition to a more service-based economy. Changes in policy regarding offshore manufacturing jobs. Potential changes in the basic work week.
Hold on, strap in, its going to be a ride, not knowing where the path leads.
I was going to post some political shit today, but I was distracted by some music. I turns out I needed a decompression day. What better way than listen to music? I believe it is almost impossible to over state the importance of music to humanity. Even better, I discovered a new to me musical group. Songs I’ve heard before with new interpretations. The moods of music are endless. I haven’t finished the entire playlist yet so they will await another day. The following poem was published here in May of 2021
It is known music soothes the savage beast This is as true as the sun rises in the east
Music is a magical thing A million variations make my heart sing
Music can make you happy Sometimes it makes you feel sappy
It gives movies character and strength To do its job, it will go to any length
Music can stir anyone to a crazy dance Music makes the world a better place, Just give it a chance
I have over 30 playlists on YouTube. One is a study of different interpretations of “Nothing Else Matters” by Metalica. Even if you don’t like the group, there will be at least one interpretation that you will enjoy.
What is the purpose of the K-12 educational system? These are just my thoughts and of course are subject to debate. To provide for the ability to face adult life, to enable one to select a career path, to contribute to the collective good of society and allow it to seek progress towards its goals.
There is so much wrong with our educational system, I don’t know if I can address it all. Certainly not in one blog post, but I need to start somewhere.
The first thing, in my opinion, is to get rid of vouchers and charter schools. They are merely disguised methods of transferring wealth from the poor and the middle class to the wealthy. Gone.
The next thing to be addressed is in order to educate our youth, we need competent educators. They must be paid, to start, what anyone with their educational requirements can expect. We can’t keep losing educators to bartender jobs. Then there must be room for professional growth. Areas having a hard time getting competent staff will have to pay more. ALL students must have access to competent staff. Class sizes must be reduced to the point where individual needs can be addressed. There must be help for students with needs or the ability to grow faster than normal.
Another issue is equity. The lottery of birthplace or parentage should not affect access to quality education. This inequity is largely because of the financing structure of our educational system. At this point I am talking only about the k-12 portion. Currently funding is primarily from property taxes and state funding. Very often, state legislators use the educational system as a budget balancing tool. This needs to be equalized on a national level. Educational funding needs to become an entitlement not subject to budget balancing. Home schooling should be discouraged except in exceptional cases. Part of the educational process is being able to fit into society.
The curriculum needs to be broad based with some focus on life skills in addition to the base science, math, and language skills. A complete history of the world and the US needs to be taught including the truth about slavery, colonialism, genocide, Holocaust, and the role of religion in history. Critical thinking should be emphasized throughout the educational process. High school graduates should have a good understanding of how our political system works. Generally, all books should be available to be read. We need to lift up the bottom half of our population so they can become thinking citizens. The old levels of education will have a difficult time surviving with the new level of technology and the requirements of dealing with where life is going.
This is going to be a long process with results not significant for many years. We must persevere.
I Haven’t posted any poems in a while, so here are a couple.
Music is the soul of life Without it life has no substance It is fundamental to existence It is the ethos of joy in life It is the lifeblood of creativity It exiles stress from our lives With it, life is a lavish feast Banish all that is wrong It will enclose you in bliss It creates its own radiance With music, life is in balance Listen to music, be at peace
Quest for knowledge
The eternal quest for knowledge Without it life is a void It is the escape from the abyss Knowledge is the bridge from cluelessness Knowledge needs a receptive gallery A generative field on which to grow Positive stimulation is the bedrock of knowledge It is the stimulus to make humanity develop It is the fuel of change Today I learned intumesce It’s what happened to my knowledge Every day it generates anew
This is a book review about a book that shall remain nameless. For the past few years, I have been doing some reading on how to become a better writer. One of the books I read is: “The First Five Pages: A Writer’s guide to staying out of the Rejection Pile” by Noah Lukeman. He makes an excellent point, echoed by other writers, that it is necessary to hook the reader early and essentially pull him through the work. As a reader, I concur with this. In the book I am reviewing here, I am on page fifty and I still don’t know what the book is about. Nothing has happened. The library opens in three hours and the book is going back and replacements will be found. This book has been highly recommended and is written by a Pulitzer Prize winning author. If I mention the name, you would likely say: “how could you not like that book? What is wrong with you”?
This is not my first experience of having a problem with a Pulitzer Prize winning novelist. Two things could be at work here. The Prize doesn’t mean the story will be interesting or I have an internal rebelliousness against that which is supposed to be good. Or maybe I just randomly picked two Prize winning authors who maybe didn’t deserve a prize.
Philosophy: The love of wisdom, a discipline that seeks truth through reasoning rather than empiricism.
Wisdom: the ability to apply relevant knowledge in an insightful way, especially to different situations from which the knowledge was gained.
Everyone is a philosopher whether they know it or not. Some try to make a living at it. The saying “Don’t quit your day job” applies.
Many years ago, in my college days, I needed a class to help fill in my humanities requirements as part of my degree program. I picked an introductory philosophy course because it was offered at what I thought was a convenient time. As it turned out, it was a convenient time for napping. The professor was boring. The content didn’t have any meaning to me. Fast forward about forty years. The word existentialism came up in some of my reading a few times. I decided to investigate because I thought the word had a cool sound (what better reason to investigate?). I ended up reading several books on the subject. The thing that kept me going was the challenge of trying to understand. One of the authors, a translator of Nietzsche said words to the effect “if you read through Nietzsche once and think you understand him… you don’t”. For me, this describes my relationship with philosophy in general. I keep at it because I want to understand. I am making progress, but it is a very expansive field of study.
Philosophers have their own language and way of approaching things. They use logic to prove a premise. It is often a play on words and very intricate. One must go very slowly and weigh every word. Reading it is work. I don’t know why I read it for recreation. One of the mysteries of life.
One of the little pleasures I get out of life is seeing and thinking about the questions raised, intentionally or not, by the various movies and television shows I watch and books I read. Of course, the Star Trek body of work is probably the best known of these. They took on almost everything and if it didn’t make you think, you weren’t paying attention. Novels written by a small cadre of writers in France, is the basic source of what has become known as existentialism. Philosophy is everywhere.
“How not to be wrong, The power of mathematical thinking” by Jordan Ellenberg.
I think this is a good, useful book well worth the time to read.
When I was in high school, I was a little above average in mathematical ability. Many times, since then, I have tried to improve my practical math skills by reading books purporting to help with this. The problem is they contained a lot of formulas that built on each other, and I quickly was lost putting in the effort I thought was appropriate to what I planned to get out of them. This is not the format of “How not to be wrong”. In the introduction, Ellenberg promised not to use deep mathematics to prove his points. He largely kept to this. A couple of times I felt a little lost, but he always tied it all together with reasonable prose at the end.
The book is a history of the evolution of math, especially probability and statistics, since 1600. He uses many anecdotes to make his points. He has a surprising sense of humor for a math geek. He is also a philosopher and a political commentator. Throughout the book, he provides a format for adding to our understanding of the past and dealing with the present and the future. Not the whole story, but a worthy addition to our tool kit of critical thinking.
Let’s, for a moment, assume all the problems the US has, that are swimming around in my head are solved. Where do we go from here? What is the future going to look like? One of the concepts I learned in high school is exponential compounding. After awhile things start getting big faster as time goes on. People tend to ignore the long-term implications of this. They think, for example, a company growing at a 15% annual rate will continue forever. I did a little math. At 15% annual rate, compounded, the smallest company on the S&P500 would equal the entire US GDP in 61 years. This obviously can’t happen. The current mindset is for growth, in constant year dollars, in the GDP of 3% per year. This means in 14 years; the GDP will be 50% higher than it is today. Unless we are just going to make big piles of stuff, these goods and services must be consumed. A great deal of this output will require the use of physical resources.
Can we, as consumers, consume 50% faster than we are today? Do we need to? Are we preparing ourselves for the inevitable change? The answer to these questions is NO. Are there better ways to use our lives? YES.
As AI and robots take over an increasing portion of the workload, we must make adjustments. The requirements for people to do physical work is going to decrease. One option is to reduce the traditional work week. A lot of work will need to be done to arrive at a proper mix. Shorter days, shorter work weeks, rotating schedules, and other ideas we don’t even perceive yet.
The future will inevitably look different. I think it will evolve towards a “Trekkie” type civilization. If we survive, the future will have eliminated poverty and uncertainty about how we are going to live the next day.
There is more to say about this, but that will have to wait for another day. This topic will never be exhausted.