Economic power of the state, How far should it go?

[OrangeEmpire]

I was going to make this a poll, but there are so many nuances and options available, I thought I'd just ask where you fall on the spectrum. My examples here are deliberately vague and (hopefully) free from tooooo much leading jargon, so please feel free to add in your own words and ideas!

So... where do you fall?

• Nothing -- just let people do what they want, when they want? Maybe there's not even any currency... just a bunch of happy barterers? (note: at this time, there is no state that exists like this in real life)
• The "lightest touch" possible? Enforcement of contract... little, if anything more.
• Government "referees" and the enforcement of fair play? Light regulation -- deals primarily with cheaters, unfair/illegal business practice, breaking up the occasional monopoly.
• A paternal government? Spreading the wealth a bit with progressive taxes... maybe some protectionism. Many more examples of public property begin to show up here...
• A maternal government? Spreading the wealth with higher progressive taxes... spending said money for the supposed benefit of the "little people," moderate to high protectionism, cradle-to-grave government involvement in individuals' economic lives.
• A fully planned economy? Just ratchet everything up a few notches and take away private property altogether!
• Star Trektopia? Economy is handled almost entirely by the government. Currency no longer exists. Everybody is happy. (note: at this time, there is no state that exists like this in real life)

Thoughts?

 

[emainvol]

I was going to make this a poll, but there are so many nuances and options available, I thought I'd just ask where you fall on the spectrum. My examples here are deliberately vague and (hopefully) free from tooooo much leading jargon, so please feel free to add in your own words and ideas!

So... where do you fall?

• Nothing -- just let people do what they want, when they want? Maybe there's not even any currency... just a bunch of happy barterers? (note: at this time, there is no state that exists like this in real life)
• The "lightest touch" possible? Enforcement of contract... little, if anything more.
• Government "referees" and the enforcement of fair play? Light regulation -- deals primarily with cheaters, unfair/illegal business practice, breaking up the occasional monopoly.
• A paternal government? Spreading the wealth a bit with progressive taxes... maybe some protectionism. Many more examples of public property begin to show up here...
• A maternal government? Spreading the wealth with higher progressive taxes... spending said money for the supposed benefit of the "little people," moderate to high protectionism, cradle-to-grave government involvement in individuals' economic lives.
• A fully planned economy? Just ratchet everything up a few notches and take away private property altogether!
• Star Trektopia? Economy is handled almost entirely by the government. Currency no longer exists. Everybody is happy. (note: at this time, there is no state that exists like this in real life)

Thoughts?

In a perfect world? Bullet point one. In the world we live in? Somewhere between bullet points three and four.

Edit: Actually, in a perfect world I think the Star Trektopia would give "nothing" a run for its money, simply because, as stated, everyone is happy.

 

[OrangeYankee]

for me somewhere between option2 and option 3 (closer to 3) ... With there being an easy way for the people to press a "BUZZZ LET'S TRY THAT AGAIN SHALL WE." To elaborate, having a strike down option from the people so we don't get a politician who goes on a power trip (gee imagine that), and tries to shut a company down that has pissed him off.

 

[dcgf05]

bullet points 2-3... with obama forcing points 5-6. If michelle obama was proud to be an american for the first time when her husband ran for president, I am ashamed to be an american for the first time in my life with her husband as president. :censored:

 

[volinbham]

Somewhere between these 2 points -- leaning more towards the first one.

Government "referees" and the enforcement of fair play? Light regulation -- deals primarily with cheaters, unfair/illegal business practice, breaking up the occasional monopoly.

A paternal government? Spreading the wealth a bit with progressive taxes... maybe some protectionism. Many more examples of public property begin to show up here...

 

[emainvol]

Somewhere between these 2 points -- leaning more towards the first one.

Never would have thought I was that close to you, of course I am leaning more towards the second one you quoted. As I learn more about economics and the societal makeup of this country, I start to see that my ideology isn't necessarily the most practical at the moment. It doesn't mean my views have changed as much as I have more insight into what can work within our present society.

 

[vols4sure]

Somewhere between these 2 points -- leaning more towards the first one.

This would be me. However, in my ideal world the states would not be as dependent on the federal government. The federal system is more corrupt and it seems harder to hold them accountable. I would much rather give more of my tax dollars to the state than the feds.

I don't want the likes of Pelosi, Frank, and Reid making decisions that have such an effect on me and the state of TN. After the Obama administration, with this Congress, it will only get worse and TN will be in the welfare line completely dependent on the federal government along with every other state. California deserves it, TN does not.

 

[volinbham]

Never would have thought I was that close to you, of course I am leaning more towards the second one you quoted. As I learn more about economics and the societal makeup of this country, I start to see that my ideology isn't necessarily the most practical at the moment. It doesn't mean my views have changed as much as I have more insight into what can work within our present society.

Regulation is definitely needed. But like everything, one size doesn't fit all. The financial sector requires much since transparency and trust are critical to valuing financial instruments. Other industries require relatively little - standard laws of fraud, deception, negligence, etc. should cover things.

There is some basic need for a safety net but we've blown that idea completely out of the water with our current "no one should suffer ever" philosophy of government.

Fiscal and monetary policy should be used sparingly. We cannot remove business cycles. Trying to manage the downside without managing the upside does not work. The government should stay out as much as possible here.

 

[BigPapaVol]

Regulation is definitely needed. But like everything, one size doesn't fit all. The financial sector requires much since transparency and trust are critical to valuing financial instruments. Other industries require relatively little - standard laws of fraud, deception, negligence, etc. should cover things.

There is some basic need for a safety net but we've blown that idea completely out of the water with our current "no one should suffer ever" philosophy of government.

Fiscal and monetary policy should be used sparingly. We cannot remove business cycles. Trying to manage the downside without managing the upside does not work. The government should stay out as much as possible here.

I agree with this, but there are some markets where only accredited investors should be playing and they know the risks they are undertaking.

In situations like the credit default swap world, where the instrument is propping up an enormous market, then we should regulate heavily and preclude certain types of entities from ever investing. The debacle with them was an absolute failure of regulations because they should have been treated just like the AMBACs and MGIC's of the world and required to retain capital like insurers. However, there are still going to be new instruments in the future that we won't know to regulate until it's too late.

My concern would be that we regulate much of the profit and reward for ingenuity out of the system and run much of the capital, intellectual and otherwise out of the system.

 

[volinbham]

I agree with this, but there are some markets where only accredited investors should be playing and they know the risks they are undertaking.

In situations like the credit default swap world, where the instrument is propping up an enormous market, then we should regulate heavily and preclude certain types of entities from ever investing. The debacle with them was an absolute failure of regulations because they should have been treated just like the AMBACs and MGIC's of the world and required to retain capital like insurers. However, there are still going to be new instruments in the future that we won't know to regulate until it's too late.

My concern would be that we regulate much of the profit and reward for ingenuity out of the system and run much of the capital, intellectual and otherwise out of the system.

To add to this: Like many laws, the problem here has partly been lax or non-existent enforcement rather than lack of regulation.

The uptick rule comes to mind. Set the rules, enforce them consistently so investors and others can trust the system. Don't regulate risk - regulate transparency so people can make their own judgments about risk and act accordingly.

As we've said time and time again, government shenanigans in housing are a big part of the problem here.

 

[BigPapaVol]

To add to this: Like many laws, the problem here has partly been lax or non-existent enforcement rather than lack of regulation.

The uptick rule comes to mind. Set the rules, enforce them consistently so investors and others can trust the system. Don't regulate risk - regulate transparency so people can make their own judgments about risk and act accordingly.

As we've said time and time again, government shenanigans in housing are a big part of the problem here.

Those shenanigans are a problem along with the credit default swap issue, which many have talked about for years, including Greenspan and Buffet. That, to your point, was about the regulators refusing to call the writers of those swaps what they really are - insurers.

 

[gsvol]

1. Enough government to maintain order and enforce the laws of the land, and those laws should be minimal and not too intrusive into private lives.

2. Enough government to protect our country from foreign threat.