Today's Buggy Topic Ranges Farther Than . . .

. . . the subject-title indicates.   The topic, as it unfolded, turned out to lend itself to a ranging analysis, and Prof bug ended up with 5 long posts, all filled with lots of documentary evidence --- some even quantitative.   The Netherlands, misinterpreted by a loud-mouthed ideologue of hilarious semi-hysterical tendencies --- she later called the buggy prof a racist several times in the thread at Economist's View --- turned out to be a good test-case.  That opened the way to more posts on the subject, which then led to wider concerns.

No Need To Say More

Click here for the thread and the several bugged-out posts.  Be sure to continue your reading on the second page of the thread by clicking on the bottom of the initial page where it says "Show More Comments."

Today's Buggy Topic Continues The . . .

. . . same topic treated a couple of days ago.   What it boils down to, as you'll see with more detail and new analysis in the latest buggy post, is a significant difference in the way the advanced European welfare-states raise their tax revenue compared to the tax system in this country.

The USA Side  

American government at all levels --- federal, state, and local --- rely heavily on either visible income tax and visible property taxes for its revenue, with sales taxes averaging across the 50 states about 5-6% . . . some states, four or five anyway, not even having a sales tax.  In the upshot, the Federal government fiscal year for 2010 is expected to raise 50% or so of expected total revenue of around $2.2 trillion by income taxes . . . with, to boot, the bottom 50% or so of American income-earners not paying any federal tax at all.  Social security contributions will likely generate another 40% or so of total revenue. And as you'll see, state and local governments hope to raise another $2.2 trillion by a combination in large part of income-taxes and taxes on real estate and private property, plus business taxes and fees.

The European Side

To finance larger governmental spending, especially social spending of various kinds, the EU countries rely, of course, on income tax and to an extent property tax as well, but they have all instituted a half-concealed, easy-to-raise VAT --- value-added tax --- that is fairly similar to American sales taxes, with the end consumer paying the tax. 

Enter the difference.   VAT taxes --- which vary in West Europe between about 19-25%, not 5-6% as sales taxes do here --- contribute about the same percentage of total government spending as income taxes do: roughly, 30-33%.  It's a huge contrast, this percentage.  And the reasons for its existence, and its downsides --- it's highly regressive despite some exemptions or lower VAT on certain essential goods and services, and it has encouraged a large and growing underground tax-evaded economy that is about two to four times higher in Europe than in the USA . . . our country estimated in the best studies to have the smallest underground economy, roughly 8% of GDP.

All These Differences, Along With A . . .

. . . systematic analysis of other causes of these tax differences across the Atlantic --- not to forget recurring tax rebellions in the USA historically and at present --- are set out in the prof bug post that can be found here.

Today's Buggy Topic

The subject-title needs no introductory comments.  Please click here for prof bug's lengthy, data-filled analysis and be sure to scroll to the bottom of the first page of the threat at Economist's View,  then click on the "show more comments" tab to find it.

Today's Buggy Topic Was . . .

. . . inspired by a Paul Krugman op-ed in the NY Times, linked to at Economist's View, in which Krugman argued in favor of the US government officially condemning China as a currency-manipulator and imposing tariff retaliation against it.   His reasons?  China's ongoing large trade surpluses with the US during the current recession and for that matter with the outside world --- its multilateral current account surplus, trade in goods and services.

In the lengthy thread that followed at Economist's View, there were the usual empty-assertions left by the usual suspects, some in favor of Krugman's tactic and others opposed.   No matter.  Neither side offered much in the way of concrete evidence.  

Enter Prof Bug's Two Long Posts

The first dealt at length with the almost equally large German trade surplus in goods and services on a multilateral basis, and to an extent with the large and similar Japanese multilateral trade-surplus as well.  Yet, despite these big trade surpluses with the rest of the world, neither the Euro or the Yen can be accused of currency manipulation ---- keeping their currencies artificially low against the $US.  On the contrary, both currencies have risen steadily against the dollar throughout the last decade.   As prof bug also showed in that post, the French government openly criticized the ongoing trade surplus of the Germans, arguing that it is holding back the Eurozone recovery from the recession by draining fiscal stimulus packages' impact on job-creation out of the 15 members of the eurozone besides Germany and into that country's still anemic growth-recovery. 

Enter the more central issue in the second prof bug post.

In it, prof bug notes that the Chinese renmimbi (the name of the Yuan for trade purposes with the outside world) climbed 20% against the $US between July 2005 and July 2008, a period when the Chinese government did let its currency float gradually upward with no or limited effort to intervene to stop it, and yet the Chinese trade surplus --- multilateral and bilateral with the USA --- rose to unprecedented rates.  

So What's Going On?

As prof bug argued, a country whose economy is organized to run trade surpluses for decades does so because --- for reasons of both specific governmental policies and cultural norms held by the populations ---- national consumption is kept low compared to those countries like the English-speaking countries and most of the big countries in Europe.   In the upshot, national production exceeds national consumption (absorption), and the excess is bound to be exported and produce a trade surplus.   In technical terms, domestic savings exceed domestic investment, and the excess savings are exported abroad in the capital account of the balance of payments, which automatically entails an export-surplus in the current or trade account in goods and services. 

And no matter what the currencies of such countries happen to be in dollars or other foreign currencies, a trade surplus will still materialize unless the private and public sectors start to save less and consume more.  

Ultimately, it's true, an increasingly appreciating currency like the Yen or the Euro --- over which, as you know, the German government has no influence, with the European Bank for the eurozone letting the Euro float freely --- will gradually entice more and more households and businesses to buy cheaper foreign goods . . . though so far, a very large appreciation of the Japanese Yen for two decades now, has not had that impact.  China's government, by contrast, is a Communist dictatorship, and its government can maneuver to limit national consumption by fiat.  

Click Here for the Buggy Posts 

And note how the growing annoyance with China's trade surplus in Washington D.C. ---- including the Obama White House --- reflects a growing discontent of a wider sort with Chinese foreign policies and diplomacy.  Oh, don't forget.   To find prof bug's two posts, scroll down to the end of the first page of posts at Economist's View,  click on the "show more comments" bar, and find the posts on that second page. 

Today's Buggy Topic

The subject-title above, long-winded as it might be, captures the topic faithfully.   In a thread dealing with it at Economist's View, prof bug left a long detailed comparison of unemployment benefits in the USA with those in West Europe, the latter being systematically reduced in benefit-generosity and duration almost everywhere there . . . in line with the EU Lisbon Strategy, adopted earlier in the last decade, to improve the overall productivity-growth  of the member-states and  encourage them to move more quickly from an industrial base toward a New Information-Based Economy of the sort the US pioneered back in the 1980s and 1990s.  

Click here for the buggy stuff. 

Today's Buggy Topic Is . . . 

. . . captured accurately by the above subject-title, with prof bug posting three times to refute some nonsensical left-wing blather on US-Canadian relations.  Click here for the posts. 

Today's Buggy Topic Is . . . 

. . . captured accurately by the above subject-title, with prof bug posting three times to refute some nonsensical left-wing blather on US-Canadian relations.  Click here for the posts. 

Today's Buggy Topic

The subject title captures the rangy buggy prof commentaries, found as usual in a thread at Economist's Views.  Click here for the buggy stuff.

Today's Buggy Topic Is .. .

. . . really a riposte to a radical left-wing poster at Economist;s View, where the chronic and compulsive 7 or 8 posters --- who hog about 80% of the posts --- are convinced that Chile's strong commitments to free-market policies should work against successful economic development, solid democracy, and the sort of flagrant corruption that flourishes all over Latin America except in Chile and Uruguay.   The opposite has been the case, a reality-based claim that prof bug's two posts in the relevant threat at Economist's View try to show.

Click here for the buggy stuff.

Today's Buggy Topic Consists Of . . .

. . . Two lengthy posts on the wise-ranging subjects mentioned above --- with an extensive discussion in the 2nd post of Smith's attack on empire-building and the recent work by international relations scholars on how the combination of rule-based free trade, market-economies and democracy, and regional and global institutions like WTO, World Bank, the EU, NAFTA, and NATO contribute to peace.  Click here for the buggy stuff.

Today's Buggy Topic Continues The ...

... same prof bug stuff that the previous buggy article dealt with . . . Chile's remarkable economic and political record since returning to democracy in 1990 after 27 years under military dictatorship, that return --- reflected in General Pinochet's holding free elections (thanks to American pressure), then losing and stepping down.   You'll find the two buggy posts if you click here.

Today's Buggy Topic Seems . . .

. . . Odd at first sight, no?  Still, it's accurate enough, and three long buggy posts deal with it in a thread at Economist's View.   Click here for the prof bug stuff.

Oh, almost forgot.  I bang out those lengthy comments left at Economist's View at breakneck speed and pause only for a search for data.   No time for review, let alone revisions,  and most of the time, I suppose, it doesn't matter.  Alas, in one of those posts in the thread just linked to,  you'll find some sloppy syntax for which I apologize.