[dwar0123]

mike777, on 2012-September-26, 19:44, said:

I thought the purpose of a carbon tax was to prevent temperature from rising in the first place.

A resource-management proposal to prevent future disasters.

In the same sense as the purpose of sex is to have grand children.

There is definitely a connection but it is neither direct nor the only reason.

[mike777]

dwar0123, on 2012-September-26, 19:47, said:

In the same sense as the purpose of sex is to have grand children.

There is definitely a connection but it is neither direct nor the only reason.

ok what is the direct reason or other reasons?

[dwar0123]

mike777, on 2012-September-26, 19:50, said:

ok what is the direct reason or other reasons?

Because it feels...

Oh, the direct reason is to encourage a reduction in carbon emissions by those being taxed.

Another reason is to raise revenue.

[hrothgar]

dwar0123, on 2012-September-26, 19:56, said:

the direct reason is to encourage a reduction in carbon emissions by those being taxed.
Another reason is to raise revenue.

Here's the thing...

It's possible to have a revenue neutral carbon tax.
More-over, if you're goal is to raise revenue there are much better ways to do so (VATs, etc.)

[dwar0123]

hrothgar, on 2012-September-26, 20:18, said:

Here's the thing...

It's possible to have a revenue neutral carbon tax.
More-over, if you're goal is to raise revenue there are much better ways to do so (VATs, etc.)

Too be clear I personally support a carbon tax and not for the financial reasons. I am also quite left in my leanings.

However, the term revenue neutral strikes me as misleading language. All tax money is spent somewhere, revenue neutral just means the benefactor of this revenue is predetermined.

[mike777]

dwar0123, on 2012-September-26, 20:27, said:

Too be clear I personally support a carbon tax and not for the financial reasons. I am also quite left in my leanings.

However, the term revenue neutral strikes me as misleading language. All tax money is spent somewhere, revenue neutral just means the benefactor of this revenue is predetermined.

ok but why support it...I mean your only goal is to reduce gas emissions because why?
Again you say your main goal is not to stop temp. from rising in the first place or stop disasters


"I thought the purpose of a carbon tax was to prevent temperature from rising in the first place.

A resource-management proposal to prevent future disasters"
--

btw I think one can be quite left and be against a carbon tax and for liberal gun laws. ONe can be quite far right and be for a tax and against liberal gun laws

[dwar0123]

mike777, on 2012-September-26, 20:40, said:

ok but why support it...I mean your only goal is to reduce gas emissions because why?
Again you say your main goal is not to stop temp. from rising in the first place or stop disasters


"I thought the purpose of a carbon tax was to prevent temperature from rising in the first place.

A resource-management proposal to prevent future disasters"

Because reducing carbon gas emissions will lessen the amount of warming from carbon. I guess I'm not comfortable skipping as many steps between cause and effect as you, it leads to misunderstandings and people talking past each other.

[hrothgar]

mike777, on 2012-September-26, 20:40, said:

ok but why support it...I mean your only goal is to reduce gas emissions because why?

Mike, you've been reading these forums for a decade.
If you don't under this issue by now just give up...

[Cthulhu D]

lalldonn, on 2012-September-26, 18:33, said:

I don't pretend to be an expert, but I have long been under the impression that the government should deficit spend when the economy is bad/slow (to stimulate the economy), and run surplusses when the economy is doing well (to pay off the deficits you ran when the economy was slow). It seems the problem is that the second part rarely happens.

I have one other major issue with your proposal. Wouldn't that give the president/congress/political parties/etc. incentive to either start a war or keep an existing war going in order to fund their desired spending levels? That seems like the last thing we need.

There are a bunch of right wing lunatic economists that believe government intervention, particularly deficit spending, is the only cause of recessions. They also reject the use of models, statistics and maths when testing economic theories, so I leave it up to you what to make of that.

However this represents a significant body of economic thought used by the republican party, leading to these NO DEFICITS EVER positions.

[y66]

cherdano, on 2012-September-26, 08:41, said:

Or maybe you confused debt and deficit?

I mean, wow, this thread is bad even by watercooler standards.

The Reuter's article confused debt and deficit when it stated

Quote

Such a tax would generate approximately $88 billion in 2012, rising to $144 billion by 2020, the report said, slashing U.S. debt by between 12 and 50 percent within a decade, depending on how high the deficit climbs

According to the CRS authors

Quote

Enacting the carbon tax options discussed in the previous section could reduce future budget deficits. As illustrated in Figure 4, a $20/mtCO2 price on carbon (increasing by 5.6% annually) would have a considerable impact on budget deficits using CBO’s August 2012 baseline projection.

• The 10-year budget deficit could be reduced from $2.3 trillion to $1.1 trillion, or from 1.1% to 0.5% of GDP.
• Overall, a $20/mtCO2 price on carbon would reduce the 10-year budget deficit by more than 50%.

Under CBO’s alternative fiscal scenario, the same carbon tax would have a smaller impact on budget deficits.

• The deficit would be reduced from $10.0 trillion to $8.8 trillion, or from 4.9% to 4.4% of GDP.
• Overall, a $20/mtCO2 price on carbon would reduce the 10-year budget deficit by about 12%.

Perhaps our arachnid colleague's estimates were calculated from the single year projections for 2020 which is pretty understandable given the way the Reuter's article was written. Or perhaps not. I get between 1.4% and 6.3% when I compare those projections.

[mike777]

I thought the purpose of a carbon tax was:



"I thought the purpose of a carbon tax was to prevent temperature from rising in the first place.

A resource-management proposal to prevent future disasters."

I am for it. My concern is:

"But there are ideas that reliably cause disasters and one of them is, notoriously, the idea that the future can be scientifically planned"


But if we dont know it will do this and only be a massive redistribution of wealth i would be against it.


If, I mean if, this is just another arrogant example of putting massive economic power into the same political hand, I would be against it.

[VMars]

lalldonn, on 2012-September-26, 18:33, said:

I have one other major issue with your proposal. Wouldn't that give the president/congress/political parties/etc. incentive to either start a war or keep an existing war going in order to fund their desired spending levels? That seems like the last thing we need.

That was my first reaction, too.

[billw55]

mike777, on 2012-September-26, 21:46, said:

If, I mean if, this is just another arrogant example of putting massive economic power into the same political hand, I would be against it.

Agree. And conversely, if (and only if) this would be a genuine program to reliably improve our environment, I could be for it.

But I have seen our government in action. I have a very high level of confidence that the former is much more true than the latter.

[phil_20686]

Bbradley62, on 2012-September-26, 18:47, said:

Agreed. Federal budgets should be balanced in the long term with some years running deficits and some years running surpluses.

This isn't even true. You should run, on average, a deficit roughly in line with your natural population growth. It makes sense to spend more than you have now in order to build the capital that your future citizens will need. This is especially true for human capital.

Actually that is not even true. You should also want to have a stock of Government treasuries that is large enough (say 30-60% of gdp for the total stock) for the Fed to engage in effective monetary policy. This isn't strictly necessary, but if you want to fund asset purchases to control inflation/interest rates, then you need to have something that the Fed can buy, without massively distorting spending patterns. If you buy bonds from the government you are basically just spreading the money out among all government spending programs, in the same way as deficit spending. This avoids the Keynesian problem of inefficient spending. In practice its hard to quickly come up with plans to spend enough money to get out of a depression, without just wasting a lot of it. Of course, wasting it can be better than not spending it, but you would rather spend it and build useful things.

Large temporary deficits are not a problem, and neither are small persistent deficits in a growing population. Persistent large deficits normally end up with inflation. Political systems that are dysfunctional seldom get their act together, and eventually the central bank ends up having to bail them out or face the total meltdown of the system.

[phil_20686]

Bbradley62, on 2012-September-26, 18:47, said:

Agreed. Federal budgets should be balanced in the long term with some years running deficits and some years running surpluses.

This isn't even true. You should run, on average, a deficit roughly in line with your natural population growth. It makes sense to spend more than you have now in order to build the capital that your future citizens will need. This is especially true for human capital.

Actually that is not even true. You should also want to have a stock of Government treasuries that is large enough (say 30-60% of gdp for the total stock) for the Fed to engage in effective monetary policy. This isn't strictly necessary, but if you want to fund asset purchases to control inflation/interest rates, then you need to have something that the Fed can buy, without massively distorting spending patterns. If you buy bonds from the government you are basically just spreading the money out among all government spending programs, in the same way as deficit spending. This avoids the Keynesian problem of inefficient spending. In practice its hard to quickly come up with plans to spend enough money to get out of a depression, without just wasting a lot of it. Of course, wasting it can be better than not spending it, but you would rather spend it and build useful things.

Large temporary deficits are not a problem, and neither are small persistent deficits in a growing population. Persistent large deficits normally end up with inflation. Political systems that are dysfunctional seldom get their act together, and eventually the central bank ends up having to bail them out or face the total meltdown of the system.

[phil_20686]

Bbradley62, on 2012-September-26, 18:47, said:

Agreed. Federal budgets should be balanced in the long term with some years running deficits and some years running surpluses.

This isn't even true. You should run, on average, a deficit roughly in line with your natural population growth. It makes sense to spend more than you have now in order to build the capital that your future citizens will need. This is especially true for human capital.

Actually that is not even true. You should also want to have a stock of Government treasuries that is large enough (say 30-60% of gdp for the total stock) for the Fed to engage in effective monetary policy. This isn't strictly necessary, but if you want to fund asset purchases to control inflation/interest rates, then you need to have something that the Fed can buy, without massively distorting spending patterns. If you buy bonds from the government you are basically just spreading the money out among all government spending programs, in the same way as deficit spending. This avoids the Keynesian problem of inefficient spending. In practice its hard to quickly come up with plans to spend enough money to get out of a depression, without just wasting a lot of it. Of course, wasting it can be better than not spending it, but you would rather spend it and build useful things.

Large temporary deficits are not a problem, and neither are small persistent deficits in a growing population. Persistent large deficits normally end up with inflation. Political systems that are dysfunctional seldom get their act together, and eventually the central bank ends up having to bail them out or face the total meltdown of the system.

[luke warm]

phil_20686, on 2012-September-27, 09:09, said:

This isn't even true. ...

you must have been amazingly proud of this post

[blackshoe]

lalldonn, on 2012-September-26, 18:33, said:

I don't pretend to be an expert, but I have long been under the impression that the government should deficit spend when the economy is bad/slow (to stimulate the economy), and run surplusses when the economy is doing well (to pay off the deficits you ran when the economy was slow). It seems the problem is that the second part rarely happens.

I have one other major issue with your proposal. Wouldn't that give the president/congress/political parties/etc. incentive to either start a war or keep an existing war going in order to fund their desired spending levels? That seems like the last thing we need.

Personally, I'd rather figure out what's causing the economy to be "slow". Perhaps there's some way to fix that without the government spending more than it takes in. Also, I suspect that leaving money in the hands of private investors is a better long term strategy than this business with the government trying to control the economy through deficit spending.

[awm]

blackshoe, on 2012-September-27, 21:12, said:

Personally, I'd rather figure out what's causing the economy to be "slow".

At this point it seems like the main problem is that people who would spend money don't have money to spend. This perpetuates a lack of demand, which keep unemployment high. Because of the low demand, businesses look to make money by cutting costs rather than expanding; they are able to reduce employee salaries and benefits (even if the company is highly profitable -- see verizon and caterpillar for examples) because the high unemployment rate makes it unappealing for workers to quit (as they may not find another job, and the company can always hire an unemployed person at the minimum wage). State governments are also cutting lots of jobs, basically because they can't run a deficit (many states have the balanced budget amendment) and because the combination of unemployment, reducing salaries, and lack of economic activity reduces tax revenue. This makes the unemployment situation worse, and perpetuates the lack of money in the hands of people who would spend it.

We basically need to figure a way to get money into the hands of poor/middle class people who will spend it. Note that big corporations have lots of money (record profits, trillions sitting on the sideline) as do wealthy individuals (CEO salaries keep increasing by large amounts every year, for example); getting more money to these people isn't the answer.

At this point there are several possible solutions. The direct ones involve the government either using deficit spending to employ people, or redistributing wealth by raising taxes on those who won't spend the wealth and using it to subsidize (either through jobs or welfare) people who will spend it. This evidently goes against your political leanings. An alternative approach would involve passing measures like raising the minimum wage or mandating paid time off (which would basically force wealth redistribution from businesses to employees without the government as a direct intermediary) or strengthening unions (which might allow employees to negotiate better deals for themselves despite the downward wage pressure from the high unemployment rate) but again these measures are opposed by those with "fiscal conservative" leanings. The economy will probably become "unstuck" in the long run anyway, but basically all the measures that will speed up the process do require government intervention of one form or another.

Anyway, as far as a carbon tax goes, the main purpose of this type of tax is to encourage good behavior. It's compatible with a free market system -- one legitimate role of government in a free market is to make sure people pay for externalities. If I can just pollute your air and water without paying for it, the free market system breaks down into anarchy and militarism -- it's easier for me to just take your stuff than follow contracts. Of course the revenue raised in this way can be used for something, but I think most proponents of a carbon tax would say the ideal situation is that no one pays it (i.e. everyone is carbon-neutral)!

[cherdano]

blackshoe, on 2012-September-27, 21:12, said:

Personally, I'd rather figure out what's causing the economy to be "slow". Perhaps there's some way to fix that without the government spending more than it takes in. Also, I suspect that leaving money in the hands of private investors is a better long term strategy than this business with the government trying to control the economy through deficit spending.

But this is a false choice. You think that if the government doesn't run a deficit, than instead investors will take loans to make investments. But investors don't currently have the luxury of taking out 10-year loans at negative real interest rates.

Usually, it's a lot more expensive to defer paying your bills for 10 years. For the US government, it's cheaper to do that.