All you need to know about gun control

Michael Heumer’s paper from Social Theory and Practice.

Why the outrage over drones?

I don’t understand the outrage over drone strikes.

Drone strikes kill civilians. As does all military action.

Do drone strikes kill more civilians per capita than conventional alternatives? Seems doubtful to me. The Hellfire missiles which drones fire are pretty accurate and not particularly powerful.

Because drones are cheap to operate and can stay up for longer than conventional alternatives, I’d buy that far more strikes occur with drones than without drones. Perhaps this leads to more civilian casualties in absolute numbers, but isn’t it the relative rate – civilians killed per target killed – that matters?

So perhaps people are simply using drone stikes as a wedge issue to push for their real goal of ending US hostilities in Afghanistan / Pakistan. I’m pretty ambivalent about the conflict myself, but don’t really go in for such intellectually dishonest methods. Just make your case(s) against the hostilities themselves.

You also come across claims that the US is setting a dangerous precedent by using drones. The assumption here seems to be that the US is somehow “clearing the way” for future drone use – potentially by terrorists, rogue nations, or enemy states – which would then be targeted at the US or US forces elsewhere.

This line of reasoning is simply silly on its’ face. Sure, others may be able to use our technology if they steal or adapt or are inspired by it, but there’s no reason to believe that such malignant forces would avoid using drones against US interests if the US had never deployed drones in the first place. The US didn’t wait for Imperial Japan to deploy nuclear weapons before using them. If someone’s going to fight, they’ll use whatever they want, regardless of what the other side has (unless they’re being merciful).

I suspect that the true cause of the anti-drone movement is simple pacifism.

Pacifists – or anyone opposed to US military hegemony or the aggressive deployment of US military force – are concerned about what drones mean for the future of US military policy. Drones are cheap to use, safe (for American soldiers), extremely effective, and most importantly politically cheap. A President is now able to deploy frighteningly lethal force across many parts of the globe without risking US lives. No more political concerns over downed American pilots being strung up for all of the world to see. Bombs away, nothing to worry about.

This prospect terrifies pacifists (and the other groups mentioned above). And rightfully so.

 

Get ready for some party time`

The VAT is coming. I hope you’re all excited. I know that I am!

Basically I see things playing out like this: The US will keep batting around larger and larger classes of rich people, ratcheting up rates and removing deductions. This is politically popular and ineffective at raising revenue. Precisely because it is ineffective, this will continue for some time.

As Winston Churchill said, “Americans can always be counted on to do the right thing…after they have exhausted all other possibilities.”

I continue to hope that the French government manages to enact it’s own 75% millionaire’s tax – it’s failure to improve the government’s fiscal standing just may induce other nations – including my own – to restrain themselves.

So, where were we… ah yes! The VAT. Well, it’s obvious right? After the rich have been soaked – maybe even a one time wealth tax will enter play! – and the coffers are still bleeding, there is only one thing left to do: Soak everyone else!

Bloomberg (the publication) estimates that a 10% VAT could raise $750B annually. Along with some other tweaks, this could actually improve the fiscal standing of the Federal Government quite a bit. Not sure what all of the poor insolvent State and Local governments will do, but they’ll figure something out I’m sure.

And that, folks, is why I believe bond holders remain copacetic in the face of daunting US public debt levels.

But sometimes, politics is interesting too

I found this discussion (audio), from NPR’s Planet Money, to be an enjoyable fifteen minute listen.

“What’s remarkable about political deals in politics isn’t that they take so long, but that they occur at all.”

Politics is lame

All of this hand wringing over a “fiscal cliff” which, had the government gone over it (let’s juice this metaphor for all she’s got), would have improved the fiscal standing of the government by raising tax rates and cutting spending.

Taxation in the US is already ridiculously over progressive. Now it’s going to be even more so… Don’t get me wrong, I’m in favor of an overall progressive taxation system, but this is just dumb.

Happy New Year!

Mssr Cowen’s excellent list of things to watch for in 2013 is about as comprehensive and level headed as such a list can be.

However… I’d like to point out a mistake which I believe many English speakers make: Taking Lating politics at face value:

2. Pressures for secession in Catalonia, and a potential crisis of the Spanish state.

The particular eventuality of Catalonian secession strikes me as sufficiently unlikely as to be not worth mentioning. Catalan governments, officials, academics, and the public have clamored for secession for ages without action. It’s a bit like Quebec secession talk – noisy but with nothing there. That’s how Latin politics often works, right? Lots of high minded bluster which sounds remarkable to us earnest English speakers. And then nothing much happens.

Bernard-Henry Lévy touched on this a bit with his “In the Footsteps of Tocqueville” series. The US is a very earnest place: Politicians are supposed to behave to certain standards – and the are held to them! Drivers don’t drive on the shoulder as a matter of course. Tax law is taken seriously. All law is taken seriously.

Politics as showmanship is somewhat lost in the US – especially the modern US. Whilst I agree completely with Mssr Hanson that “politics is not about policy,” it is still important to point out that signaling simply happens in a different ways in different parts of the world.

Liberalism’s $15,000 problem

Ross Douthat touches on a problem which the modern leftist project faces: The political inability to raise enough taxes to pay for the welfare state. He postulates that because Democrats weren’t even able to raise rates on those making below $400,000, then they will have trouble raising rates on those making even down to $100,000. While his point is most likely true, it doesn’t acknowledge the obvious actual problem.

For the currently designed welfare state to continue, taxes have to increase on the middle class and the poor.

The concept that anything near current and projected spending can be financed solely by the rich or even upper middle class is simply false. Democrats and Republicans alike are in dreamland when it comes to this. The US is currently (2013) taxing it’s rich as much or more than almost every other OECD nation – whilst taxing it’s poor and middle classes at far lower rates.

Politics demands that the most popular solutions be tried until one is forced to try an alternative. This means that higher taxes on the rich, then the “semi rich” and so one will happen until the Federal government is forced to soak the 85% of the populace whom currently pay very little tax.

Inequality statistics are irrelevant

Not only may they be misleading, GINI and similar metrics are irrelevant as well.

Let’s say we’re talking about Joe Everyman, citizen of America. He knows that the Richie Riches are way the hell richer than him. And he’s not happy about it. He votes for higher taxes on those fat cats, he begrudges the fancy estates flaunted in the NYT (or perhaps some reality show), he knows that CEOs make 300 times more than he does.

So we’re saying that his enmity would be greater if the CEOs made 600 times? Or less if the CEOs made 50 times?

Bill Gates $66B wealth should net around $2.4B in income annually. Joe Everyman would be less angry if that number were $500M? More angry were it $5B?

Ridiculous.

All of these numbers are incomprehensible to Joe Everyman. All that he knows is that they make a ton, so much that they are able to live in a way that he can’t.

Joe Everyman is more upset at getting passed over for a promotion worth $2,500 per year than he is about Bill Gates making $2.4B. In fact, it’s not even close – one gets him extremely worked up and angry, the other he thinks about exceptionally rarely and with little emotion.

One reads much about the French Revolution sparked by inequality, or perhaps the Arab Spring. Inequality may have had rhetorical use, but if there were no massive famine, there was no French Revolution. No culturally incompatible indignities, no Tunisian revolution. Ditto for the culturally and religiously incompatible ex-dictators of Egypt, Libya, and (hopefully soon) Syria.

Sure, the deposed despots of all of these nations were rich. But so are the despots and democratically elected leaders of many countries (nearly all of them really) whom have not faced revolt.

Redistribute some wealth!

What would happen if the US government were tomorrow to sieze and redistribute Bill Gate’s massive fortune?

1. Gates, with the largest fortune in the US, is worth $66B. Quite the princely sum if ever there were one!
2. There are 311M citizens of the USA.
3. $66b/311M = $212

That’s right, $212. Not $212,000. Not $2.1 million.

A measly $212.

Gates can barely afford to buy each American an Xbox 360.

And once everyone has their Xbox 360 (plus a few tacos), that’s it. One of the great fortunes of the early 21st century is gone forever, consumed by the rabid American everyman.

Indeed, given the fiscal situation of the US federal and local governments, one could say that his fortune has already been consumed. Many times over.

Your money

From an insightful NYT op-ed from Prof Mankiw:

In 2009, the most recent year for which data are available, the richest 1 percent of Americans paid 28.9 percent of their income in federal taxes, according to the Congressional Budget Office. (That includes income taxes, both individual and corporate, and payroll taxes.) Members of the middle class, defined as the middle fifth of households, paid 11.1 percent of their income in taxes.

I had intended to offer comment on the absurdity of the fiscal cliff talks, and Mankiws’ piece describes the situation rather well: it doesn’t matter. Take two minutes and read his thoughts in their entirety.

He continues:

One point, however, cannot be disputed: Even if President Obama wins all the tax increases on the rich that he is asking for, the long-term fiscal picture will still look grim. Perhaps we can stabilize the situation for a few years just by taxing the rich, but as greater numbers of baby boomers retire and start collecting Social Security and Medicare, more will need to be done.

I would say that this is an extreme understatement from the esteemed Professor.

Federal taxes alone are currently taking 30% of the top 1%’s income. Add on state taxes and we’re probably looking at an average rate of about 33% for the top 1% (I’m trying to estimate conservatively).

Let’s break down some boring numbers:

• Total US household income (2007): $7.7T
• Income share of top 1% (2008): 18%
• Extrapolated total income of top 1%: $1.4T

Extrapolating further, currently $.5T comes from the top 1% income taxes alone. If we raise the effective top marginal rate to 50%, which is likely past the Laffer peak, government revenues should increase at most by $.2T. $200B, or basically nothing when it comes to the government’s current $16T debt and massive looming fiscal problems.

And that is the most. The best case. The miracle scenario for rich people taxation.

Now, what about that other $6.3T? Yes, all of that income not made by the 1%. That is where the budgeted money will come from. Your own pocket and no one else’s.