9 Ideas From Around the World to Fix the American Economy
October 21, 2011 8:14 PM Subscribe
9 Ideas From Around the World to Fix the American Economy. "People in the U.S. confuse big government and small government as the only two models. What we need is smart government". Selected economic and social policies that actually work - from Germany, Brazil, Israel, Canada, Australia, China, Thailand and Singapore.
The set of things that would help the American economy is huge. The problem is that the set of things that are politically possible is limited to the intersection of the things that are acceptable to the Republican party; The set of things that are acceptable to the most conservative members of the Democratic caucus; And the set of things that won't cost a large industry any money. The intersection of that set and things that will help the American economy seems to be the empty set.
posted by Grimgrin at 8:37 PM on October 21, 2011 [33 favorites]
posted by Grimgrin at 8:37 PM on October 21, 2011 [33 favorites]
Been there. Done that. NEVER WORKED. Somebody has not been paying attention.
posted by oneswellfoop at 8:54 PM on October 21, 2011
posted by oneswellfoop at 8:54 PM on October 21, 2011
How about we lower taxes? Bueller? Bueller?
Also, if we get rid of all environmental and child labor regulations, I'm told the "job creators" will hire us again.
Well, they'll hire our children. To spray formaldehyde on blue whales. For company scrip. But hey! It's a job. And that's all that counts.
(Did I really spell "formaldehyde" correctly on the first try without looking it up and slightly drunk? What the hell?)
posted by dirigibleman at 8:55 PM on October 21, 2011 [11 favorites]
Also, if we get rid of all environmental and child labor regulations, I'm told the "job creators" will hire us again.
Well, they'll hire our children. To spray formaldehyde on blue whales. For company scrip. But hey! It's a job. And that's all that counts.
(Did I really spell "formaldehyde" correctly on the first try without looking it up and slightly drunk? What the hell?)
posted by dirigibleman at 8:55 PM on October 21, 2011 [11 favorites]
blargerz: Tax cuts only help the economy if they stimulate spending. In a depressed economy where individual consumers priority is paying down debts, and where businesses aren't investing because of slack demand, tax cuts ultimately just mean less government spending, and represent a net loss to the economy.
posted by Grimgrin at 8:56 PM on October 21, 2011
posted by Grimgrin at 8:56 PM on October 21, 2011
That'll never work. * nola has not nor will ever read anything involving something related to anything. All, but not limited to are and should be underwriten hither tw0 F4our*
posted by nola at 8:57 PM on October 21, 2011 [1 favorite]
posted by nola at 8:57 PM on October 21, 2011 [1 favorite]
"What we need is smart government."
Or GOOD government. The kind that actually serves the people, and not in the way from that Twilight Zone episode.
One of the biggest impediments to achieving that is convincing many people that Smart Government or Good Government are more possible than Unicorns.
posted by oneswellfoop at 8:59 PM on October 21, 2011 [3 favorites]
Or GOOD government. The kind that actually serves the people, and not in the way from that Twilight Zone episode.
One of the biggest impediments to achieving that is convincing many people that Smart Government or Good Government are more possible than Unicorns.
posted by oneswellfoop at 8:59 PM on October 21, 2011 [3 favorites]
I am not an economist. Several of these ideas sounded really good to me. But, this is Metafilter, so I'm just going to bitch:
From: Canada
Idea: A Worthwhile Tax
With the 2012 Presidential election looming, the idea of springing any new taxes on the American public verges on heresy. But digging out of our fiscal hole will require the government to find ways to increase tax revenues one way or the other. For a start, look north. Unlike the U.S., Canada has a national sales tax—the Goods and Services Tax, currently levied at 5 percent. Consumption taxes such as these are less harmful than a tax on wages and salaries (which discourages work) or a tax on investment (which discourages saving). Livio Di Matteo, an economist at Lakehead University in Thunder Bay, Ont., believes the U.S. could go a long way toward solving its budget problems with a national sales tax and a fatter gasoline tax. "The U.S. is a rich country," he says, "and its deficit situation is more a political rather than economic problem." Consumption taxes might be one "worthwhile Canadian initiative" that's worth a closer look.
That bolded part? That is complete and utter bullshit. You know who is discouraged from working? People who have trust funds. Everyone else is really encouraged to work because they want to live indoors and eat every day. Consumption taxes hurt the poorest the most- people who have to spend every cent they have just to maintain a minimum standard of living. And cutting taxes on "investments" to "stimulate saving" is entirely pointless when people have absolutely no extra money to save.
I do agree that our deficit situation is a political, rather than economic problem, though.
posted by Leta at 9:00 PM on October 21, 2011 [17 favorites]
From: Canada
Idea: A Worthwhile Tax
With the 2012 Presidential election looming, the idea of springing any new taxes on the American public verges on heresy. But digging out of our fiscal hole will require the government to find ways to increase tax revenues one way or the other. For a start, look north. Unlike the U.S., Canada has a national sales tax—the Goods and Services Tax, currently levied at 5 percent. Consumption taxes such as these are less harmful than a tax on wages and salaries (which discourages work) or a tax on investment (which discourages saving). Livio Di Matteo, an economist at Lakehead University in Thunder Bay, Ont., believes the U.S. could go a long way toward solving its budget problems with a national sales tax and a fatter gasoline tax. "The U.S. is a rich country," he says, "and its deficit situation is more a political rather than economic problem." Consumption taxes might be one "worthwhile Canadian initiative" that's worth a closer look.
That bolded part? That is complete and utter bullshit. You know who is discouraged from working? People who have trust funds. Everyone else is really encouraged to work because they want to live indoors and eat every day. Consumption taxes hurt the poorest the most- people who have to spend every cent they have just to maintain a minimum standard of living. And cutting taxes on "investments" to "stimulate saving" is entirely pointless when people have absolutely no extra money to save.
I do agree that our deficit situation is a political, rather than economic problem, though.
posted by Leta at 9:00 PM on October 21, 2011 [17 favorites]
In reality we all want a smart government. I mean we're all Monday morning quarterbacks to the whole thing anyway, with our comments and such. No one wants thier tax dollars wasted, and we see a thousand things every day in the newspaper that cost millions or billions or even trillions that lead down nowhere roads.
This is where the Republicans and Tea Partiers get off. Less government means less government waste right? Well yeah, that's one way, to cut everything. But besides the two viewpoints is a choice of smart people. Who make smart choices. Who don't waste money.
I think any of us would be willing to give a portion of our money to a government led by smart people with money sense. But we don't have that. And I don't see how we can ever have that. So going with a less government spending platform seems attractive to many.
posted by sanka at 9:26 PM on October 21, 2011 [2 favorites]
This is where the Republicans and Tea Partiers get off. Less government means less government waste right? Well yeah, that's one way, to cut everything. But besides the two viewpoints is a choice of smart people. Who make smart choices. Who don't waste money.
I think any of us would be willing to give a portion of our money to a government led by smart people with money sense. But we don't have that. And I don't see how we can ever have that. So going with a less government spending platform seems attractive to many.
posted by sanka at 9:26 PM on October 21, 2011 [2 favorites]
After reading that today was national fisting day, I scrolled down and read this link as "9 Ideas From Around the World to FIST the American Economy".
posted by Chekhovian at 9:29 PM on October 21, 2011 [7 favorites]
posted by Chekhovian at 9:29 PM on October 21, 2011 [7 favorites]
What we really need going forward is to work smarter, not harder.
BusinessWeek, my rates are very reasonable, call me.
posted by indubitable at 9:36 PM on October 21, 2011
BusinessWeek, my rates are very reasonable, call me.
posted by indubitable at 9:36 PM on October 21, 2011
Well of course no one is like, "Eh, income taxes are too high, I guess I'll just be unemployed." But there is some effect even for non-trust-fund people...You can bet I'd think twice if someone offered me a job that paid 20% more for 20% more work, given that I'd only get around 12% extra after taxes, and time spent with my family is incredibly valuable. Income tax would then be discouraging me from working. If there were a low income tax in exchange for a high sales tax, I could at least take the higher-level job and save the money for a worthy cause like retirement, coming out ahead.
I can't believe I'm defending a consumption tax -- most of the people in the US who support it are truly vile. But there are real, measurable, somewhat modest benefits to be gained by incentivizing middle-class workers to work a little bit harder. This is the fundamental reason most countries use them for a large chunk of their revenues. Of course they also have extensive rebates so poor people can still afford to live.
posted by miyabo at 9:42 PM on October 21, 2011
I can't believe I'm defending a consumption tax -- most of the people in the US who support it are truly vile. But there are real, measurable, somewhat modest benefits to be gained by incentivizing middle-class workers to work a little bit harder. This is the fundamental reason most countries use them for a large chunk of their revenues. Of course they also have extensive rebates so poor people can still afford to live.
posted by miyabo at 9:42 PM on October 21, 2011
blargerz: Tax cuts only help the economy if they stimulate spending.
Right...but tax cuts. It will fix the ecomoney.
posted by blargerz at 9:45 PM on October 21, 2011
Right...but tax cuts. It will fix the ecomoney.
posted by blargerz at 9:45 PM on October 21, 2011
miyabo, you're not making the argument that additional taxes make you not want to work. You're arguing than the additional income you'd earn is not worth, to you, the time you could no longer spend with your family. Unless you're saying that you wouldn't agree to lose X time-with-family for 12% more income, but you would for 20% more income.
posted by kithrater at 9:49 PM on October 21, 2011
posted by kithrater at 9:49 PM on October 21, 2011
blargers: Ah... Irony. I'm not so good with irony when discussing economics. Poe's law is in force in any discussion of economics.
posted by Grimgrin at 9:50 PM on October 21, 2011
posted by Grimgrin at 9:50 PM on October 21, 2011
Anyone with two kidneys can always make some extra money. Now make way, peons, I'm late for the coven-I-mean-convention.
posted by blargerz at 10:05 PM on October 21, 2011
posted by blargerz at 10:05 PM on October 21, 2011
You can bet I'd think twice if someone offered me a job that paid 20% more for 20% more work, given that I'd only get around 12% extra after taxes
Then why wouldn't you find a job that paid 20% less for 20% less work since you would only be getting 12% less after taxes?
The point is that your reasons for working longer or shorter are more complicated than just the tax rate.
posted by JackFlash at 10:11 PM on October 21, 2011 [4 favorites]
Then why wouldn't you find a job that paid 20% less for 20% less work since you would only be getting 12% less after taxes?
The point is that your reasons for working longer or shorter are more complicated than just the tax rate.
posted by JackFlash at 10:11 PM on October 21, 2011 [4 favorites]
It seems pretty obvious at this point that the real ideological struggle is simply whether we will continue letting the hyper-wealthy hoover up every dollar in the economy as fast as possible or... not.
Claiming that policies are "Not Smart" is ridiculous, of course they're "Smart" it's just that the real goals are not same as the claimed goals. Politicians act ridiculously stupid on TV, but that's just because they're being disingenuous.
People are running around talking about how we have to save the world from the horrible budget deficit, but they won't talk about raising taxes as a solution. Why not? Because obviously if the budget isn't cut, taxes will go up eventually. And if taxes go up, that's less money for the super rich!
Anyway other then that the idea is kind of ridiculous overall. Of course we need "smart government" There is no one who disagrees with the idea of "smart government" The problem is just different goals.
posted by delmoi at 10:26 PM on October 21, 2011 [3 favorites]
Claiming that policies are "Not Smart" is ridiculous, of course they're "Smart" it's just that the real goals are not same as the claimed goals. Politicians act ridiculously stupid on TV, but that's just because they're being disingenuous.
People are running around talking about how we have to save the world from the horrible budget deficit, but they won't talk about raising taxes as a solution. Why not? Because obviously if the budget isn't cut, taxes will go up eventually. And if taxes go up, that's less money for the super rich!
Anyway other then that the idea is kind of ridiculous overall. Of course we need "smart government" There is no one who disagrees with the idea of "smart government" The problem is just different goals.
posted by delmoi at 10:26 PM on October 21, 2011 [3 favorites]
Unless I've gone completely mad, wasn't it part of a larger Conservative thing a few years back that not only would they roll back the GST but get rid of it entirely?
Anyways, I like the idea of gouging and screwing being more universally applied.
Anyways: The GST is not a blanket tax, there are exceptions that are not taxed. This is mostly food and other necessities. According to my mom childrens' clothes used to be GST exempt too. There is also the GST rebate, which in my case isn't anything to scream about, but it keeps me in coffee so there's that.
All in all I think the point was to make it more of a luxury tax than a screw the poor tax.
posted by selenized at 10:26 PM on October 21, 2011 [1 favorite]
Anyways, I like the idea of gouging and screwing being more universally applied.
Anyways: The GST is not a blanket tax, there are exceptions that are not taxed. This is mostly food and other necessities. According to my mom childrens' clothes used to be GST exempt too. There is also the GST rebate, which in my case isn't anything to scream about, but it keeps me in coffee so there's that.
All in all I think the point was to make it more of a luxury tax than a screw the poor tax.
posted by selenized at 10:26 PM on October 21, 2011 [1 favorite]
There was a big debate in BC a couple years ago about a VAT and I read some good material on it. VATs are certainly regressive, but apparently (and I'm pretty sure this came from a non-partisan source) they empirically have a minimal negative impact on the consumer spending. And if you complement the VAT with a low-income rebate, it takes the edge off the regressiveness.
Bumping up the top tax bracket is better, of course, but if VAT+rebate is the compromise solution, it's not a bad one policy-wise.
In conclusions: NINE NINE NINE.
posted by auto-correct at 11:00 PM on October 21, 2011
Bumping up the top tax bracket is better, of course, but if VAT+rebate is the compromise solution, it's not a bad one policy-wise.
In conclusions: NINE NINE NINE.
posted by auto-correct at 11:00 PM on October 21, 2011
Poe's law is in force in any discussion of economics.
I had to look that up. I assumed it involved pits and pendulums.
posted by furiousthought at 11:34 PM on October 21, 2011 [1 favorite]
I had to look that up. I assumed it involved pits and pendulums.
posted by furiousthought at 11:34 PM on October 21, 2011 [1 favorite]
the real ideological struggle is simply whether we will continue letting the hyper-wealthy hoover up every dollar in the economy as fast as possible or not...There is no one who disagrees with the idea of "smart government" The problem is just different goals.
Good policy is difficult no matter what the goal is. Sure, the American economy has been running mostly for the benefit of the ultra-rich over the past decade, but are America's billionaires as rich as they could be? It's not at all clear that American economic policy '00-'10 enriched the rich as much as a plan for stable growth would have. The stock market crash was bad for many of them, too.
Canada has a national sales tax—the Goods and Services Tax
Yes, if the US wanted to copy one Canadian idea with the aim of enriching the rich relative to the poor, that would be the one.
posted by justsomebodythatyouusedtoknow at 11:52 PM on October 21, 2011
Good policy is difficult no matter what the goal is. Sure, the American economy has been running mostly for the benefit of the ultra-rich over the past decade, but are America's billionaires as rich as they could be? It's not at all clear that American economic policy '00-'10 enriched the rich as much as a plan for stable growth would have. The stock market crash was bad for many of them, too.
Canada has a national sales tax—the Goods and Services Tax
Yes, if the US wanted to copy one Canadian idea with the aim of enriching the rich relative to the poor, that would be the one.
posted by justsomebodythatyouusedtoknow at 11:52 PM on October 21, 2011
As selenized pointed out, the GST was designed so as to minimize its effect on the poor.
First, as mentioned above, are the exemptions. The largest expenses of those below the poverty line, food and rent, are both exempt from GST. Some other services such as health care (for things not covered by Medicare), education costs and child care costs are also exempt. The poor and seniors also get a rather more sizable GST rebate than other Canadians, come tax time–at least theoretically, the unemployed should end up with no net GST after the rebate.
Equally important, a lot of government spending goes towards social services, which often help the poor. So, even if tax rates go up for everyone, the poor usually end up receiving more benefits from the increased spending than the higher taxes they pay in.
All this is why the Tory GST cuts are generally considered slightly regressive. The important take-away isn't that consumption taxes are good for the poor, or bad for them. Rather, it's that they have to be designed appropriately. So if one is proposed for your jurisdiction, look at it closely before deciding what you think.
posted by vasi at 12:37 AM on October 22, 2011 [1 favorite]
First, as mentioned above, are the exemptions. The largest expenses of those below the poverty line, food and rent, are both exempt from GST. Some other services such as health care (for things not covered by Medicare), education costs and child care costs are also exempt. The poor and seniors also get a rather more sizable GST rebate than other Canadians, come tax time–at least theoretically, the unemployed should end up with no net GST after the rebate.
Equally important, a lot of government spending goes towards social services, which often help the poor. So, even if tax rates go up for everyone, the poor usually end up receiving more benefits from the increased spending than the higher taxes they pay in.
All this is why the Tory GST cuts are generally considered slightly regressive. The important take-away isn't that consumption taxes are good for the poor, or bad for them. Rather, it's that they have to be designed appropriately. So if one is proposed for your jurisdiction, look at it closely before deciding what you think.
posted by vasi at 12:37 AM on October 22, 2011 [1 favorite]
From Zimbabwe: imprison or kill sufficient members of the opposition party to render it ineffectual. Of course it's not ethical, but the thing is, since 95% of the US's socioeconomic problems are solely due to an infestation of Republicans, it would actually work.
posted by aeschenkarnos at 1:06 AM on October 22, 2011 [1 favorite]
posted by aeschenkarnos at 1:06 AM on October 22, 2011 [1 favorite]
Nations that are like the US are in trouble because of capitalism; nations in Europe with social democracy are also in trouble--yet we are to listen to ideas from those nations?
Brazil is have huge boom ...why?
to take but one example in this list of ideas from nations: Israel has had massive protests becasue of the growing disparity between the few very wealthy and the average worker. The middle class no longer able to pay rent cost of food etc and live decently. And a large percentage of the economy goes into national defense and Israel has huge population living below poverty rate. So the simple suggestion here is not working for them.
posted by Postroad at 1:52 AM on October 22, 2011
Brazil is have huge boom ...why?
to take but one example in this list of ideas from nations: Israel has had massive protests becasue of the growing disparity between the few very wealthy and the average worker. The middle class no longer able to pay rent cost of food etc and live decently. And a large percentage of the economy goes into national defense and Israel has huge population living below poverty rate. So the simple suggestion here is not working for them.
posted by Postroad at 1:52 AM on October 22, 2011
And a large percentage of the economy goes into national defense and Israel has huge population living below poverty rate.
Hmmm...that sounds kind of familiar. Might be some lessons to learn in that, ya think?
posted by Jimbob at 1:56 AM on October 22, 2011
Hmmm...that sounds kind of familiar. Might be some lessons to learn in that, ya think?
posted by Jimbob at 1:56 AM on October 22, 2011
"Small government" in Americanese actually just means the same size or larger government with more allocated to defense and less to social programs. But what would be nicer even than "smart gov't" is "unbought gov't".
posted by BrotherCaine at 1:59 AM on October 22, 2011 [1 favorite]
posted by BrotherCaine at 1:59 AM on October 22, 2011 [1 favorite]
Right...but tax cuts. It will fix the ecomoney.
You're already paying the lowest taxes in over 30 years. So, start hiring, already!
posted by Thorzdad at 2:07 AM on October 22, 2011
You're already paying the lowest taxes in over 30 years. So, start hiring, already!
posted by Thorzdad at 2:07 AM on October 22, 2011
That bolded part? That is complete and utter bullshit. ... Consumption taxes hurt the poorest the most- people who have to spend every cent they have just to maintain a minimum standard of living.
I just wanted to echo this. With our recent VAT rise (the UK's consumption tax), analysis has shown that it hits the poor the hardest. You know, the people who have the spend more of their income of meeting their basic needs -- like food.
Redistributing the tax burden to the rich. Now there's an idea.
posted by Lleyam at 3:17 AM on October 22, 2011
I just wanted to echo this. With our recent VAT rise (the UK's consumption tax), analysis has shown that it hits the poor the hardest. You know, the people who have the spend more of their income of meeting their basic needs -- like food.
Redistributing the tax burden to the rich. Now there's an idea.
posted by Lleyam at 3:17 AM on October 22, 2011
or a tax on investment (which discourages saving)
Of course we don't want to discourage saving. (Not being facetious or sarcastic here.) Saving money is good, and everybody should save money. Most people should save much more than they do. Save money in case of unforeseen expenses or emergencies, so you're not hard hit when disaster strikes. Save money for large purchases you plan to make in the future, so you won't have to pay interest on credit. Saving is good.
The problem is that after a certain point, saving turns into hoarding. The money isn't doing you any good, and it's not benefiting the economy by circulating. We need to adjust tax rates so that we can encourage saving and discourage hoarding.
posted by Faint of Butt at 4:01 AM on October 22, 2011 [1 favorite]
Of course we don't want to discourage saving. (Not being facetious or sarcastic here.) Saving money is good, and everybody should save money. Most people should save much more than they do. Save money in case of unforeseen expenses or emergencies, so you're not hard hit when disaster strikes. Save money for large purchases you plan to make in the future, so you won't have to pay interest on credit. Saving is good.
The problem is that after a certain point, saving turns into hoarding. The money isn't doing you any good, and it's not benefiting the economy by circulating. We need to adjust tax rates so that we can encourage saving and discourage hoarding.
posted by Faint of Butt at 4:01 AM on October 22, 2011 [1 favorite]
Nations that are like the US are in trouble because of capitalism
Who are these 'nations that are like the US'? (curious, genuine question...)
posted by pompomtom at 4:20 AM on October 22, 2011
Who are these 'nations that are like the US'? (curious, genuine question...)
posted by pompomtom at 4:20 AM on October 22, 2011
Part of why Germany is doing so great is that they haven't had to upkeep a big military since the end of WWII. Of course they get to reap the rewards of those savings.
Nearly all of Israel's military is either directly funded by the US or through sweetheart loans from the US. (Let's face it, they are practically our 51st state)
A massive, disproportionate part of the US budget goes into her own armed forces and the various wars (overt and covert) which we ware mired in.
My idea would be to first cut back on all military spending and bring the troops home. I really don't see the need to keep bases in Germany or Japan either, and we can surveille the globe from satellites and planes at this point.
Once we see how we are economically after that, we should look at who should be paying more taxes.
posted by Renoroc at 7:58 AM on October 22, 2011 [1 favorite]
Nearly all of Israel's military is either directly funded by the US or through sweetheart loans from the US. (Let's face it, they are practically our 51st state)
A massive, disproportionate part of the US budget goes into her own armed forces and the various wars (overt and covert) which we ware mired in.
My idea would be to first cut back on all military spending and bring the troops home. I really don't see the need to keep bases in Germany or Japan either, and we can surveille the globe from satellites and planes at this point.
Once we see how we are economically after that, we should look at who should be paying more taxes.
posted by Renoroc at 7:58 AM on October 22, 2011 [1 favorite]
After reading that today was national fisting day, I scrolled down and read this link as "9 Ideas From Around the World to FIST the American Economy".
I think we've got it pretty well covered already.
posted by dixiecupdrinking at 12:16 PM on October 22, 2011 [2 favorites]
I think we've got it pretty well covered already.
posted by dixiecupdrinking at 12:16 PM on October 22, 2011 [2 favorites]
> ... things that will help the American economy seems to be the empty set.
somebody's not thinking globally.
posted by de at 10:21 PM on October 22, 2011
somebody's not thinking globally.
posted by de at 10:21 PM on October 22, 2011
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posted by kithrater at 8:26 PM on October 21, 2011