Be careful what you wish for, Obama supporters. Bet those of you who voted for a second term never imagined how much it was going to cost to support his spending for the next 4 years. (or maybe you don't care because you don't pay taxes anyway) Gotta say, serves America right for having so much blind faith in a mediocre, if not downright BAD, president. Get ready to pony up, middle class. Barack has only just begun to spend. Obama Vows More Tax Increases January 2, 2013, 8:58 am President Obama this morning pocketed the Republican concessions on tax hikes included in the Fiscal Cliff deal and promised that it was only the beginning of new taxation to be assessed on the American people. Obama, who appeared in the White House briefing room Tuesday night to hail the deal, made clear to Republicans that he will continue to seek a “balanced” approach to deficit reduction – White House code for “balancing” spending cuts with raising taxes. Meanwhile, spending on Obama-blessed programs will continue to rise, he asserted: While the Fiscal Cliff’s automatic deficit reduction included both tax increases and spending cuts, the deal passed by Congress Tuesday night relied almost exclusively on tax increases to pare down the deficit. The massive Fiscal Cliff spending cuts that had been scheduled to take effect at the beginning of the year are still on tap, but have been delayed for two months. But if Republicans thought that out of fairness and “balance” the focus would now be on trimming spending, Obama’s comments made clear that they are deluding themselves. Having been rolled by Obama into accepting a massive tax increase, Republicans will again be pressured into embracing a “balanced” approach that cuts spending but also socks the “wealthy” for more revenues. Read more: http://www.whitehousedossier.com/2013/01/02/obama-vows-tax-increases/
Which bit? Military R&D? Shifting it now would be a good idea as its increasingly ineffective at engineering growth through spin-off technologies.
I am assuming you are talking about the diffusion capabilities of military research and development, then I agree with your assessment. However, in terms of stabilization policy, US overseas contingency operations, and US military priorities, I disagree with when it should occur. Currently, the US economy output gap is projected to not close for at least another five years, yet most likely another seven to eight years. If that is the case, then military research and development, even in all its ineffectiveness in technological diffusion, the creation of dual-use technologies, etc. should be ignored in the short-run. In the short-run, the US government would be wise to begin shifting emphasis from power-projection weaponry to, say, telecommunications technology. There are many US military weapons development programs, such as the creation of the F-35, that deserve to be canned.
I've only referred to military R&D (which can be shifted anytime such that technical progress opportunities are improved). In terms of military expenditure, that does tend to be a less effective fiscal stabilisation device. However, shifting towards something more rational would be a long term strategy (and arguably a difficult one given the influence of right wing economics)
Well, I was only referring to OCOs and US military priorities in terms of R&D. For example, US military priorities in the Asia Pacific will require the continued research and development of new super-carriers. While US OCOs continue in Afghanistan, improving the capabilities of US drones will be necessary. In terms of stabilization policy, these may not be effective in the short-run, yet security-wise, they are warranted.
All western nations use military R&D. Its more about a correction, whereby economic growth isn't necessarily harmed by the military sector
I agree. That should be the goal of the military sector in terms of economic efficiency. If that is the case, then over the long-term, a concerted effort should be made by the US military to research and develop technologies that can diffuse from the military sector to other sectors. They should also begin work on dual-use technologies. Given that US military priorities will increasingly shift towards cyber security, I do not think the increased creation of new telecommunications technologies with capabilities for other sectors is out of the question.
Reckon its too late for that. The military will struggle to shift away from the spin-in nature, as military uses for more rapid civilian advancements are sought. We'll never eliminate spin-offs. Even the waste of space Eurofighter packed a spin-off punch. However, the crowding out effects are becoming too substantial. It needs to be stripped back as quick as possible
Of course the transition would be difficult. Companies such as Lockheed Martin recognize the substantial and nearly ever-present interest their technologies receive from the military. We can simply refer to this phenomena as one of the many components of the military-industrial complex. I do not believe I implied that spinoffs will or should be eliminated.
I'm not a fan of the MIC analysis. Its a liberal approach that underestimates the important role, for good and bad, of the military sector. You misunderstand. I'm saying that we will always be able to refer to spin-offs within military R&D. However, we have to put them in perspective and realise that they will become relatively minor
I agree. Furthermore, I consider the MIC one means of analysis as part of what should be a heterodox approach to evaluating the role of the military sector.
My favourite is the Marxist 'approach'. First, its better at understanding the issues. Second, it spends most of its time arguing amongst itself with conflicting ideas. Extreme pluralism!
I am a proponent of complexity economics. It encompasses Marxian economics, but also draws upon evolutionary economics, imperfect knowledge economics, econophysics, chaos theory, institutional economics, Austrian economics, the neoclassical synthesis, behavioral economics, among other disciplines. Complexity economics is a relatively young economic discipline, about three decades old to be exact. However, it is gaining traction as the ultimate synthesis of economic disciplines.
That is essentially what complexity economists strive for. The ironic aspect about its practitioners is that the majority of them do not have a formal economics background. Many of them are physicists, evolutionary biologists, evolutionary psychologists, and mathematicians.
I do think a formal economics background is important. Its only when you understand the ins and outs of the orthodox approach that you can truly understand pluralism and avoid the toxic nature of neoclassicalism
Well, complexity economists are not devoid of basic economic knowledge. However, the discipline is often not their first. I prefer it to be that way. Where neoclassical economists fail, and do so miserably is in accounting for the complex non-linearities of such dynamic systems as economies of scale. They have adopted methodologies of the natural and physical sciences to the social science when the discipline requires a much more fluid approach rather than a mechanistic one. By the way, how did you come into your economic views? Do you have an academic background in the field?
I don't think there is anything wrong with the economies of scale stuff. Be it within a static or dynamic framework, its a simple approach to average costs after all. The problem is when they think its sufficient to explain the 'theory of the firm'. Its just not as insightful as the maths obsessed fellows think! Married to someone from the dismal science
I must disagree. Having gone through basic macroeconomics in high school, I can say that the way most economists analysis economies of scale is inadequate. If there are only a smattering of economists capable of predicting as large an financial collapse as the Global Financial Crisis of 2008, then the discipline in terms of evaluative capabilities on the macro-level is in need of reflection and revision. Of course, most economists also provide inadequate analyses of economies on the micro-level. Overall, the proponents of the neoclassical synthesis need to learn that the social science of economics is not tantamount to physics. You cannot use the physical science's stochastic models along with restrictive and unrealistic assumptions, omissions, and even the ceteris paribus principle, and expect that your predictive power and policy prescriptions will be optimal. The relationship between the stochastic models and unrealistic and restrictive assumptions, omissions, and the ceteris paribus principle is inherently a contradiction. The former element is intrinsically meant to observe phenomena that is non-deterministic, sporadic, and random. The latter three elements hinder such capabilities in the name of cognitive limitations. This should not be the case, and this is why an ultimate synthesis of the economics discipline with others is needed. The economics profession must learn to let their models run wild while having the intellectual wherewithal to correctly interpret them.
Economies of scale is a microeconomic concept which says the obvious: average costs are not constant. There is nothing inherently wrong with that. The important point is how its used. Some might suggest that it derives an 'optimal sized firm' (via u-shaped average costs). However, that's merely Econ 101. Neoclassicalism only predicts a minimum efficient scale. It can, however, have significant impact on the political economic school of thought that you adopt. Such a simple concept, for example, can shift you towards a post-Keynesian context. Seems to me you're attacking the wrong aspect. In terms of the 'old physics' stuff, its really the idea of constrained maximisation (within a static framework) that you should be attacking
The key is to close of all the loopholes and cut taxes like Reagan did and the rich end up paying more.
There's no justification for tax cuts. Even the Laffer Curve approach leads to support for tax increases
