Norquist is a libertarian bordering on anarchist. He simply hates government. Period. It's not about taxes; that's just the vehicle he uses to try and "starve the beast". We tried this method for the last 30 years. It failed. Time to stop paying attention to Norquist and try something new.
I gave mine up (10 years after my econ degree) about 20 years ago as I realized they could never defend culture or moral norms, and without those, no society can cohere for very long.
This article is a bit unfair. An ever-expanding federal government since the New Deal with an inability to rein in spending meant that the problem was not on the revenue side, but rather on the spending side. We may have now reached the point after the failure of Doge, though that was always a long shot, that we will have to use all means necessary to avoid fiscal catastrophe.
That said, it seems like any effort Trump's makes to reel in spending - liberal federal judges block the way...so you're right - the left will never allow spending to decline - so perhaps Republicans should stay the course of refusing even higher taxes....
Don has made zero attempt to control the deficit. He set the all time debt record in his first term, and is on pace to break it this term.
70%+ of our budget is Medicare, Medicaid, Social Security, defense, and interest on the debt. Any serious attempt to address the deficit must grapple with these items. Don has taken entitlement cuts off the table, and proposed dramatically higher defense spending, all while enacting massive tax cuts. Meanwhile, his inflationary policies have ballooned our interest payments. DOGE was a joke. "Cutting waste" is fine, but doesn't remotely address the issue. Grade school math doesn't lie. Don does.
As but one example, SS is now projected to be insolvent in 6 years, requiring 22% benefit cuts. Since Don has taken cuts and tax increases off the table, by definition he supports the 22% reduction. Yet he prattles on about saving the program. It's abjectly stupid.
Don lied to you when he promised to eliminate the debt in 8 years. He's done exactly the opposite, in spite of his control of the entire federal government. Don't buy his simplistic excuses. The self-proclaimed King of Debt is a lifelong flimflam man, this is merely the pattern repeating, again.
“President Trump reportedly is seeking to pay for his proposed tax cuts by increasing the top tax individual rate from 37% to 39.6%. This article provides an overview of his proposal as well as three important considerations for this 2.6% tax rate increase on the top-income earners.“
Or how about eliminating the federal student loan program? Why should non-college students and non-grads subsidize people who choose to attend college and who will benefit economically from doing so? Maybe the universities wouldn't charge so much in the end? College heads and professors earning million and multi-million dollar salaries off the backs of taxpayers isn't fair at all either.
Universities are finally using endowment for tuition…they figured out that making a university only for children of wealthy parents devalues the degree.
I listened to the podcast debate when it came out earlier this week, and I was thoroughly unimpressed by Norquist. I was honestly shocked by how sanctimonious he was, not just to Oren, but also to Henry. It's bizarre how someone with such an ornery personality--and apparent ignorance on fiscal policy--was able to convince Republicans to his side on these matters for three decades. Truthfully, I'd rather not face that question . . .
Too many comments here get distracted by the fact that Norquist is now politically dead and ideologically irrelevant. I thought Oren did a good job indicating that his one-note legacy has been incalculably influential: tax cutting as an absolutely necessary and entirely sufficient cure for policy failures, based mostly on the magical notion that cutting taxes would "starve" government and, voila!, eliminate the need for "policies". Some comments here provide evidence for the persistence of this utterly discredited view. But the one-note tax cut doctrine has only suffered the same fate as the illogical elevation by libertarians of the market's "invisible hand" aspect into another political first principle: that regulation of the marketplace is so ill-advised as to be immoral. The irony is that those in thrall to precisely these ideas howl and guffaw at Marx's proposition that in the worker's paradise, the state would simply wither away. Adherence to the equally fantastical Grover-think, however, was a highly successful populist vote getter and lobbying gold mine for Republican politicians as well as a knock-dead reason for refusing to think at all about the evolution of citizenship and governance in a changing world. President Trump has certainly picked up this ball and run with it, unhampered in the least by fiscal restraint or the most elementary attention to the construction of law, policy and governmental institutions. Don't get me wrong here. I'm not writing a brief for the Democratic party, another delusional enterprise. Both parties have been brain-dead for decades. The question is whether Oren and others like him can point a way forward to something better. I thought that both the thrust and the conclusion of this essay were excellent.
I greatly appreciate these articles by Oren. I'll try to listen to the podcast.
Shrinking the deficit is going to take a multi-pronged approach. Did the tax cuts that Norquist advocated for increase gov't revenues, as was the promise? I don't think so. It's going to get harder--energy and material surpluses are becoming a thing of the past, which will drive up all prices.
We need to think of ways to tax back unearned income from the very wealthy and the upper middle class (and perhaps parts of the middle class). That is, tax the "rent" income they receive that they earned only from being rich in the first place. And, we need to figure out how to tax back the massive increases of asset values that excessive Fed spending since 2008 rigged up. This seems to be a power play by the upper middle class and wealthy boomers that they have gotten away with--their land and house properties increasing in value by 20% per year for the past 18 years, more in select areas, not to mention the financial assets which increased by much more in some cases. This has made the economy unfair, and this unfairness is driving an interest in radical socialism as well as dysfunctions of the market system.
These ideas would be beyond the comprehension of Grover, whose metaphors utilize coca cola and ratheads and bathtub drownings. Time for this dude to retire.
He truly makes a category error by comparing party called the Republican Party of 1932 with the party called the Republican Party of 1994 (it truly is a category error). The United States once had genuinely democratic governance structures, however imperfect and limited, fundamentally based around decentralized and publicly accessible mass-member parties. The Democratic Party, as a small "d" democratic institution, and the Republican Party, as a small "r" republican institution, were honest in their naming and functioned within a politically, economically, governmentally, financially, and scientifically decentralized and pluralized system that had legal and regulatory variability, policy variability, an intentionally diffused and pluralized private sector, and local fiscal dominance. These parties, while far from flawless, allowed for real representation, genuinely participatory governance structures even for very serious policy matters by serving as an organizational interface and coordinating mesh for a wide array of organizational linked publicly accessible decision making bodies that spanned economy-schooling/training-culture-science-government, and a level of public accountability in political, economic, governmental, financial, and scientific decision making.
However, after WW2 a long multi decadal transformation began due to the dirty deeds of a convergence of several interests and an assortment of powerful special interest groups, and then our parties were transformed into centralized, exclusionary membership organizations. The so called Democratic Party has become a technocracy party, and the so called Republican Party became a conservative party. Neither really represents their original principles of democracy or republicanism, and they don't offer meaningful access or representation to the public. This transformation of the parties has been accompanied by a broader centralization of political, economic, and scientific decision making, which has caused the effective loss of most democratic governance structures.
Grover Norquist? A washed up think tank hack? He still matters? Surely there is not a more pathetic fig leaf for the guilty conscience of the "new" right.
How about some commentary on the current president of the United States, the one incurring record setting deficits with the supine congress as we speak?
Why does the "new" right refuse to take responsibility? You control the entire federal government. Don is your founder, the most powerful man in the world. Defend him.
Grover Norquist? Someday soon, fellow establishment elites will recount Oren's leadership in fashioning Don's taco tariff disaster, I can't wait...
This article misses the psychology driving the different generations. The original Progressive era was driven by the general disgust at all the corruption. Once we had switched to competitive bidding and professional city managers, our cities and states started running much better. We the people got it into our heads that the government could do more. That kicked off the canal building era.
The result of letting the government try to build a bunch of canals and railroads was watching those projects go bankrupt, then get sold off for pennies on the dollar. Wasn't a total loss, we did get the worlds best bankruptcy laws out of it. Unfortunately that also planted the seeds for the later era of government micromanagement of first the railroads and then on the almost every aspect of the economy, but that was yet to come. The result of all those government projects going bankrupt was a very fiscally conservative electorate. So conservative that the state of Michigan refused to build a bridge to Canada. Hence how the only bridge to Canada from Michigan wound up being privately owned until this year.
Of course that population of fiscally liberal voters also believed it best to allow the banks and stock markets to look after themselves. That resulted in the great depression. That itself isn't quite right. The lack of just about any rules when it came to borrowing against stock was the beginning. Over time the people who had learned to be wary of government programs had mostly died off. So we see the government once again borrowing, taxing and spending. After WW2 it had become dogma that government should micromanage their economies. During the 60s that extended right back into the idea the governments should build and own housing projects. Of course those that had seen the ravages of racking up too much debt were not going to do that again, so taxes kept climbing.
Eventually we realized that governments are lousy at micromanaging their economies. Deregulation cleaned up a lot of that mess. We were still left with the older generation that had a healthier respect for the pitfalls of piling up too much debt. They started dying off back in the 90s. Hence the steady growth of tax cuts along side spending increases. You can blame guys like Norquist but it's we the people that kept voting for it. Particularly the Boomers and older Gen X. The younger generations are really starting to feel the bight of all that debt we've built up. Our choices are increasingly be made by how it effects not only the government debt but private as well.
I don't think we're at the break point yet but you can see it coming. Particularly in other western nations that are hitting similar levels of debt. You can add states that are staring down some serious pension obligations along with already high level of debt. We living through one of those exciting periods of history that future generations of historians will pore over. A lot of changes are going to happen in a short period of time.
re: "The result of letting the government try to build a bunch of canals and railroads was watching those projects go bankrupt, then get sold off for pennies on the dollar. Wasn't a total loss, we did get the worlds best bankruptcy laws out of it."
Did we? Obama's DOE loan of $525 million to Solyndra was not recovered when the company failed.
"The U.S. government recovered very little—projections and reporting at the time indicated near-zero or only a small fraction (estimates in the low tens of millions at best in some analyses, with many contemporary accounts saying little to nothing on the bulk of the claim). The loan program took a loss of roughly $528 million on Solyndra."
Within two years of completing the transcontinental railroad, all five companies involved went bankrupt. Back in those days, that meant the companies would have been dissolved and all the assets sold off in auctions. With the proceeds going to the most senior debtors. There were no options for re-organization. The government at the time was the largest lender to those railroads.
Now you might be irritated by Solandra, and I think some of the bureaucrats involved along with energy secretary Chu, should have been prosecuted for breaking the law. They agreed to make the government the less senior creditor in a bid to keep Solandra going, which violated federal law.
All that aside, the changes that allow a company to enter into reorganization rather than having all it's assets auctioned off has saved some really big amounts of wealth that would have been destroyed otherwise. Share holders eat a big loss. Bond holders take hair cuts. But the value in the company is largely retained under new management. This has resulted over time in bondholder getting a bigger return then they would have ever gotten under the old system.
It would take Europeans another 80 years to see just how much better our system works. Even then, a lot of the European countries still only extend many of our bankruptcy protections only to corporations. That's part of why the 08 financial crisis got so much worse in places like Spain. They foreclose your home but after they sell it for a fraction of what you owed, you still own the balance. Which makes recovery much harder. Granted this is a bit of a technically complex issue, but you can thank the corruption and land grabs of the (southern) transcontinental railroad for our much better bankruptcy laws.
(Southern) You learned about "the" transcontinental railroad back in middle school. There were actually two being built at the same time. The northern one was completely privately financed and made big profits before it was even finished. That was a big part of why that generation lost faith government programs and embraced private enterprise instead. You can walk this yin-yang back to some of the original colonies that were set up as religious communes. Nothing like almost staving to death to make you believe in private property.
Solyndra was one of a portfolio of loans made by the DOE LPO. Like all loan portfolios, some loans default. Solyndra defaulted. Tesla paid back its loan. The nuclear plants at Vogtle are paying back their loans. In fact, if one were to review the public information regarding the LPO, you would see that the portfolio has yielded a profit for the US Government and taxpayers. Facts matter.
I didn't bring up Solyndra, but laws were broken in ways that weren't when Fisker Automotive and other green investments when bankrupt. As you say, facts matter.
Beyond that, the history of governments trying to subsidize or invest in industries is pretty dismal. In fact, if the point was to reduce total carbon and methane being put into the atmosphere, it was counter productive.
It would have been much better to create straight forward taxes on carbon and methane, with tariffs to prevent companies using backdoor ways of avoiding those taxes. We could use tax credits and increased welfare payments to avoid unduly burdening the poor.
That way from corporate boardrooms to kitchen tables, people would start looking for the most practical ways to reduce their costs. So rather then subsidizing electric SUVs, that once you look over their entire life cycle don't actually reduce the carbon and methane produced, people would have been more likely to add an EV commuter/grocery getter to the mix, and save on using their regular SUV for when they needed to extra space. That would have actually reduced the weight and there for the energy needed to get them around town.
That's just the tip of the whole unintended consequences iceburg. For some it would have been moving closer to the office, for others, they would eat more chicken and less beef. But the real kicker is that all these massive subsidies have done is drive down the cost of oil and gas, so it's been more affordable for people who wanted to keep driving their big gas guzzling SUVs, along with more Africans being able to fill up their scooters and motorcycles.
That economics for you. Way more complicated then politicians can manage. Hence why it's almost always better to avoid letting the government try to pick the winners and losers, and best when the rules are straight forward and apply to all rather then complex and favoring those who have political connections.
Like how Solandra built a new factory in California rather then follow GM and Toyota out of state, or at least buy an existing factory from the many vacant ones in California. All so they could give the politicians more talking points about new construction jobs. Then how Solandra used our tax money to buy a very expensive machine from the Netherlands, tying up a lot of its capital, to make the parts that it had been buying from the Netherlands, just so it could point to an additional few jobs. Yet it didn't even run that machine five shifts a week since it didn't need that many of those parts. So in that case, our tax money helped an already profitable company in the Netherlands make a bit more profit, then they bought the machine back at a steep discount.
One of the last holy cows to go. It is true that getting rid of wasteful spending is a higher priority. However, it is never wise to declare saving water as the highest priority when your house is on fire …
One thing never mentioned -- debt write down! Investors and banks have been forced to write off part of their loans. Maybe its time we do that with the US debt ?????
Norquist is a libertarian bordering on anarchist. He simply hates government. Period. It's not about taxes; that's just the vehicle he uses to try and "starve the beast". We tried this method for the last 30 years. It failed. Time to stop paying attention to Norquist and try something new.
100%. My turn from libertarianism when I had to admit most of them just hate America. Really nothing more to it.
I gave mine up (10 years after my econ degree) about 20 years ago as I realized they could never defend culture or moral norms, and without those, no society can cohere for very long.
Wonderful to see a conservative finally call out Norquist for what he is after all these years.
Michael! Great to see you in these parts, sir!
This article is a bit unfair. An ever-expanding federal government since the New Deal with an inability to rein in spending meant that the problem was not on the revenue side, but rather on the spending side. We may have now reached the point after the failure of Doge, though that was always a long shot, that we will have to use all means necessary to avoid fiscal catastrophe.
That said, it seems like any effort Trump's makes to reel in spending - liberal federal judges block the way...so you're right - the left will never allow spending to decline - so perhaps Republicans should stay the course of refusing even higher taxes....
Don has made zero attempt to control the deficit. He set the all time debt record in his first term, and is on pace to break it this term.
70%+ of our budget is Medicare, Medicaid, Social Security, defense, and interest on the debt. Any serious attempt to address the deficit must grapple with these items. Don has taken entitlement cuts off the table, and proposed dramatically higher defense spending, all while enacting massive tax cuts. Meanwhile, his inflationary policies have ballooned our interest payments. DOGE was a joke. "Cutting waste" is fine, but doesn't remotely address the issue. Grade school math doesn't lie. Don does.
As but one example, SS is now projected to be insolvent in 6 years, requiring 22% benefit cuts. Since Don has taken cuts and tax increases off the table, by definition he supports the 22% reduction. Yet he prattles on about saving the program. It's abjectly stupid.
Don lied to you when he promised to eliminate the debt in 8 years. He's done exactly the opposite, in spite of his control of the entire federal government. Don't buy his simplistic excuses. The self-proclaimed King of Debt is a lifelong flimflam man, this is merely the pattern repeating, again.
Trump stated the obvious—the top rate needs to be 39.6% and then he let Speaker Johnson steamroll him.
When did that happen?
Last year,
“President Trump reportedly is seeking to pay for his proposed tax cuts by increasing the top tax individual rate from 37% to 39.6%. This article provides an overview of his proposal as well as three important considerations for this 2.6% tax rate increase on the top-income earners.“
or maybe the Republicans should agree to higher taxes by taxing the non-profits, the universities in particularly
Or how about eliminating the federal student loan program? Why should non-college students and non-grads subsidize people who choose to attend college and who will benefit economically from doing so? Maybe the universities wouldn't charge so much in the end? College heads and professors earning million and multi-million dollar salaries off the backs of taxpayers isn't fair at all either.
Universities are finally using endowment for tuition…they figured out that making a university only for children of wealthy parents devalues the degree.
Or how about just not give them federal funds?
I listened to the podcast debate when it came out earlier this week, and I was thoroughly unimpressed by Norquist. I was honestly shocked by how sanctimonious he was, not just to Oren, but also to Henry. It's bizarre how someone with such an ornery personality--and apparent ignorance on fiscal policy--was able to convince Republicans to his side on these matters for three decades. Truthfully, I'd rather not face that question . . .
He was probably backed up with a lot of libertarian donations and political action.
It’s Congress’ job to address entitlement spending and growth. And no Congress to date has been willing to tackle it.
Too many comments here get distracted by the fact that Norquist is now politically dead and ideologically irrelevant. I thought Oren did a good job indicating that his one-note legacy has been incalculably influential: tax cutting as an absolutely necessary and entirely sufficient cure for policy failures, based mostly on the magical notion that cutting taxes would "starve" government and, voila!, eliminate the need for "policies". Some comments here provide evidence for the persistence of this utterly discredited view. But the one-note tax cut doctrine has only suffered the same fate as the illogical elevation by libertarians of the market's "invisible hand" aspect into another political first principle: that regulation of the marketplace is so ill-advised as to be immoral. The irony is that those in thrall to precisely these ideas howl and guffaw at Marx's proposition that in the worker's paradise, the state would simply wither away. Adherence to the equally fantastical Grover-think, however, was a highly successful populist vote getter and lobbying gold mine for Republican politicians as well as a knock-dead reason for refusing to think at all about the evolution of citizenship and governance in a changing world. President Trump has certainly picked up this ball and run with it, unhampered in the least by fiscal restraint or the most elementary attention to the construction of law, policy and governmental institutions. Don't get me wrong here. I'm not writing a brief for the Democratic party, another delusional enterprise. Both parties have been brain-dead for decades. The question is whether Oren and others like him can point a way forward to something better. I thought that both the thrust and the conclusion of this essay were excellent.
I greatly appreciate these articles by Oren. I'll try to listen to the podcast.
Shrinking the deficit is going to take a multi-pronged approach. Did the tax cuts that Norquist advocated for increase gov't revenues, as was the promise? I don't think so. It's going to get harder--energy and material surpluses are becoming a thing of the past, which will drive up all prices.
We need to think of ways to tax back unearned income from the very wealthy and the upper middle class (and perhaps parts of the middle class). That is, tax the "rent" income they receive that they earned only from being rich in the first place. And, we need to figure out how to tax back the massive increases of asset values that excessive Fed spending since 2008 rigged up. This seems to be a power play by the upper middle class and wealthy boomers that they have gotten away with--their land and house properties increasing in value by 20% per year for the past 18 years, more in select areas, not to mention the financial assets which increased by much more in some cases. This has made the economy unfair, and this unfairness is driving an interest in radical socialism as well as dysfunctions of the market system.
These ideas would be beyond the comprehension of Grover, whose metaphors utilize coca cola and ratheads and bathtub drownings. Time for this dude to retire.
He truly makes a category error by comparing party called the Republican Party of 1932 with the party called the Republican Party of 1994 (it truly is a category error). The United States once had genuinely democratic governance structures, however imperfect and limited, fundamentally based around decentralized and publicly accessible mass-member parties. The Democratic Party, as a small "d" democratic institution, and the Republican Party, as a small "r" republican institution, were honest in their naming and functioned within a politically, economically, governmentally, financially, and scientifically decentralized and pluralized system that had legal and regulatory variability, policy variability, an intentionally diffused and pluralized private sector, and local fiscal dominance. These parties, while far from flawless, allowed for real representation, genuinely participatory governance structures even for very serious policy matters by serving as an organizational interface and coordinating mesh for a wide array of organizational linked publicly accessible decision making bodies that spanned economy-schooling/training-culture-science-government, and a level of public accountability in political, economic, governmental, financial, and scientific decision making.
However, after WW2 a long multi decadal transformation began due to the dirty deeds of a convergence of several interests and an assortment of powerful special interest groups, and then our parties were transformed into centralized, exclusionary membership organizations. The so called Democratic Party has become a technocracy party, and the so called Republican Party became a conservative party. Neither really represents their original principles of democracy or republicanism, and they don't offer meaningful access or representation to the public. This transformation of the parties has been accompanied by a broader centralization of political, economic, and scientific decision making, which has caused the effective loss of most democratic governance structures.
Norquist has never been a serious thinker. He is a man with a hammer (tax cuts) for whom everything looks like a nail.
Grover Norquist? A washed up think tank hack? He still matters? Surely there is not a more pathetic fig leaf for the guilty conscience of the "new" right.
How about some commentary on the current president of the United States, the one incurring record setting deficits with the supine congress as we speak?
Why does the "new" right refuse to take responsibility? You control the entire federal government. Don is your founder, the most powerful man in the world. Defend him.
Grover Norquist? Someday soon, fellow establishment elites will recount Oren's leadership in fashioning Don's taco tariff disaster, I can't wait...
defend Donald "high tariffs, no immigration" Trump? Easy. see Calvin Coolidge. Done.
Except the economy is growing at 2% and it looks like we are headed for a $2 trillion deficit.
This article misses the psychology driving the different generations. The original Progressive era was driven by the general disgust at all the corruption. Once we had switched to competitive bidding and professional city managers, our cities and states started running much better. We the people got it into our heads that the government could do more. That kicked off the canal building era.
The result of letting the government try to build a bunch of canals and railroads was watching those projects go bankrupt, then get sold off for pennies on the dollar. Wasn't a total loss, we did get the worlds best bankruptcy laws out of it. Unfortunately that also planted the seeds for the later era of government micromanagement of first the railroads and then on the almost every aspect of the economy, but that was yet to come. The result of all those government projects going bankrupt was a very fiscally conservative electorate. So conservative that the state of Michigan refused to build a bridge to Canada. Hence how the only bridge to Canada from Michigan wound up being privately owned until this year.
Of course that population of fiscally liberal voters also believed it best to allow the banks and stock markets to look after themselves. That resulted in the great depression. That itself isn't quite right. The lack of just about any rules when it came to borrowing against stock was the beginning. Over time the people who had learned to be wary of government programs had mostly died off. So we see the government once again borrowing, taxing and spending. After WW2 it had become dogma that government should micromanage their economies. During the 60s that extended right back into the idea the governments should build and own housing projects. Of course those that had seen the ravages of racking up too much debt were not going to do that again, so taxes kept climbing.
Eventually we realized that governments are lousy at micromanaging their economies. Deregulation cleaned up a lot of that mess. We were still left with the older generation that had a healthier respect for the pitfalls of piling up too much debt. They started dying off back in the 90s. Hence the steady growth of tax cuts along side spending increases. You can blame guys like Norquist but it's we the people that kept voting for it. Particularly the Boomers and older Gen X. The younger generations are really starting to feel the bight of all that debt we've built up. Our choices are increasingly be made by how it effects not only the government debt but private as well.
I don't think we're at the break point yet but you can see it coming. Particularly in other western nations that are hitting similar levels of debt. You can add states that are staring down some serious pension obligations along with already high level of debt. We living through one of those exciting periods of history that future generations of historians will pore over. A lot of changes are going to happen in a short period of time.
re: "The result of letting the government try to build a bunch of canals and railroads was watching those projects go bankrupt, then get sold off for pennies on the dollar. Wasn't a total loss, we did get the worlds best bankruptcy laws out of it."
Did we? Obama's DOE loan of $525 million to Solyndra was not recovered when the company failed.
"The U.S. government recovered very little—projections and reporting at the time indicated near-zero or only a small fraction (estimates in the low tens of millions at best in some analyses, with many contemporary accounts saying little to nothing on the bulk of the claim). The loan program took a loss of roughly $528 million on Solyndra."
Seems like our leaders never learn history....
Within two years of completing the transcontinental railroad, all five companies involved went bankrupt. Back in those days, that meant the companies would have been dissolved and all the assets sold off in auctions. With the proceeds going to the most senior debtors. There were no options for re-organization. The government at the time was the largest lender to those railroads.
Now you might be irritated by Solandra, and I think some of the bureaucrats involved along with energy secretary Chu, should have been prosecuted for breaking the law. They agreed to make the government the less senior creditor in a bid to keep Solandra going, which violated federal law.
All that aside, the changes that allow a company to enter into reorganization rather than having all it's assets auctioned off has saved some really big amounts of wealth that would have been destroyed otherwise. Share holders eat a big loss. Bond holders take hair cuts. But the value in the company is largely retained under new management. This has resulted over time in bondholder getting a bigger return then they would have ever gotten under the old system.
It would take Europeans another 80 years to see just how much better our system works. Even then, a lot of the European countries still only extend many of our bankruptcy protections only to corporations. That's part of why the 08 financial crisis got so much worse in places like Spain. They foreclose your home but after they sell it for a fraction of what you owed, you still own the balance. Which makes recovery much harder. Granted this is a bit of a technically complex issue, but you can thank the corruption and land grabs of the (southern) transcontinental railroad for our much better bankruptcy laws.
(Southern) You learned about "the" transcontinental railroad back in middle school. There were actually two being built at the same time. The northern one was completely privately financed and made big profits before it was even finished. That was a big part of why that generation lost faith government programs and embraced private enterprise instead. You can walk this yin-yang back to some of the original colonies that were set up as religious communes. Nothing like almost staving to death to make you believe in private property.
Re; Solyndra - seems like the Obama Administration scalped the taxpayers for $528 million....'just saying...
Solyndra was one of a portfolio of loans made by the DOE LPO. Like all loan portfolios, some loans default. Solyndra defaulted. Tesla paid back its loan. The nuclear plants at Vogtle are paying back their loans. In fact, if one were to review the public information regarding the LPO, you would see that the portfolio has yielded a profit for the US Government and taxpayers. Facts matter.
I didn't bring up Solyndra, but laws were broken in ways that weren't when Fisker Automotive and other green investments when bankrupt. As you say, facts matter.
Beyond that, the history of governments trying to subsidize or invest in industries is pretty dismal. In fact, if the point was to reduce total carbon and methane being put into the atmosphere, it was counter productive.
It would have been much better to create straight forward taxes on carbon and methane, with tariffs to prevent companies using backdoor ways of avoiding those taxes. We could use tax credits and increased welfare payments to avoid unduly burdening the poor.
That way from corporate boardrooms to kitchen tables, people would start looking for the most practical ways to reduce their costs. So rather then subsidizing electric SUVs, that once you look over their entire life cycle don't actually reduce the carbon and methane produced, people would have been more likely to add an EV commuter/grocery getter to the mix, and save on using their regular SUV for when they needed to extra space. That would have actually reduced the weight and there for the energy needed to get them around town.
That's just the tip of the whole unintended consequences iceburg. For some it would have been moving closer to the office, for others, they would eat more chicken and less beef. But the real kicker is that all these massive subsidies have done is drive down the cost of oil and gas, so it's been more affordable for people who wanted to keep driving their big gas guzzling SUVs, along with more Africans being able to fill up their scooters and motorcycles.
That economics for you. Way more complicated then politicians can manage. Hence why it's almost always better to avoid letting the government try to pick the winners and losers, and best when the rules are straight forward and apply to all rather then complex and favoring those who have political connections.
Like how Solandra built a new factory in California rather then follow GM and Toyota out of state, or at least buy an existing factory from the many vacant ones in California. All so they could give the politicians more talking points about new construction jobs. Then how Solandra used our tax money to buy a very expensive machine from the Netherlands, tying up a lot of its capital, to make the parts that it had been buying from the Netherlands, just so it could point to an additional few jobs. Yet it didn't even run that machine five shifts a week since it didn't need that many of those parts. So in that case, our tax money helped an already profitable company in the Netherlands make a bit more profit, then they bought the machine back at a steep discount.
One of the last holy cows to go. It is true that getting rid of wasteful spending is a higher priority. However, it is never wise to declare saving water as the highest priority when your house is on fire …
Any enemy of Grover Norquist is a friend of mine!
Lee Atwater, Ralph Reed, Jack Abramoff, and Grover Norquist.
One thing never mentioned -- debt write down! Investors and banks have been forced to write off part of their loans. Maybe its time we do that with the US debt ?????
let's see... 1970 spending on the big 5 as a percent of GDP. The big five being defense, medicare, medicaid, Social security and interest - 70%.
Fast forward to today... 70%.
Now, you could make a case that previously we were spending WAY more on defense than we do today..okay. But was that a good thing?