[rondon1]

The republicans want to frame the presidential race as Big government vs. small government. "Romney wants to let the free market fuel America's success while Obama wants the government to your money and spend it how they see fit" Obama has recently tried to point out that the success of the free market in America has been dependent on the US Government. "Someone built the road and bridges and someone educated your employees, and someone built they internet that you use. Those things were funded by tax dollars." In this editorial this guy is hoping to convince people that the government was not responsible for setting the foundation of the internet.

[joshuahedlund]

As prominent libertarian thinker Julian Sanchez said on Twitter recently, "Look, I'd really love it if it were a myth that gov't created the proto-Internet, but it's just not... A decent working definition of dogmatism is the refusal to recognize that sometimes GENERAL truths have counterexamples." [1][2]

[1] https://twitter.com/normative/status/227822924575408129 [2] https://twitter.com/normative/status/227829635109515265

[delinka]

Agreed.

I recall someone saying once upon a time (this is a personal anecdote, not something from public history) that it would be in company's best interests to educate employees and therefore we should let the private free market handle education while altogether abolishing public education. I can't comprehend why anyone couldn't see how public education (or at the very least heavily regulated, all-private education) is an ultimate benefit to society.

You think 'government indoctrination' is bad now? How about when these corporations funding the schools start insisting that curricula be modified toward their own agendas? Or perhaps when they decide indentured servitude is the best way to get a 'return on investment' (i.e. we educated you/your kids for the last five years, you owe us five years of employment at reduced wages)?

But that's not actually likely to happen if education were entirely privatized. No, because corporations are focused on returns now and their numbers for this quarter and spending on education cuts into the bottom line and the ROI doesn't happen for two decades. Then, the schools realizing that everyone needs an education and it needs to be funded, start calling for taxes to pay for universal education...

It's a similar problem for pure research. No one knows if pure research will pay off. Ever. Sometimes, it pays off in fifty years. On odd occasions it pays off in less than ten. It seldom pays off in the next twelve months. Someone has to insist on pure research to move technology forward. Or we could all just stay like we are, use up our resources, and go back to living in caves.

[twoodfin]

"Someone built the road and bridges and someone educated your employees, and someone built they internet that you use. Those things were funded by tax dollars."

All of that's true, but it's also true that the guy who didn't build a business also gets to use those roads and the internet. It's also true that private spending on telecommunications infrastructure in this country utterly dwarfs public spending. And nobody serious is arguing we shouldn't have roads and bridges.

How any of this is a justification for $1T deficits and real marginal tax rates that will approach 50+% is anyone's guess.

It also sounded really bad coming out of the President's mouth. "I’m always struck by people who think, well, it must be because I was just so smart. There are a lot of smart people out there. . It must be because I worked harder than everybody else. Let me tell you something -- there are a whole bunch of hardworking people out there." Hey, maybe being "so smart" and "working harder than everyone else" doesn't guarantee success, but at least most voters think those are pretty helpful in America, and may not appreciate anyone, least of all the President, sneering at them.

[joezydeco]

It sounded bad coming out of the President's mouth because he did a very bad job of paraphrasing Elizabeth Warren. Warren put it like this:

"I love small businesses. My daughter started a small business, my brother started a small business, my aunt Alice started a small business, I worked in it when I was a teenager. This is really about a basic question of fairness. And that is, when big businesses really make it big, should they get the special tax breaks so that they don't have to make the contributions to help support all of the basic infrastructure—you know, the roads and bridges and the schools and all those pieces, the basic infrastructure that lets the next kid make it big, and the next kid after that, and the next kid after that? You know, the way I see this, this is really about the basic question of how we build our future. The Republicans have given their vision of how we build our future—they've said, 'I got mine, the rest of you are on your own'. Our vision of how you build a future is that you make the investments forward, so every kid has a chance. That's what this is really about."

[Prophasi]

The Republicans have given their vision of how we build our future—they've said, 'I got mine, the rest of you are on your own'.

Which is, in turn, a poor job of paraphrasing the actual small-government view, which would be better stated as 'I was on my own, I made it, and you can do the same.'

And not all Republicans/libertarians have made it yet. For them it might be 'I haven't made it yet, but I will -- and so can you.'

Her line implies that the view is an asymmetric "benefits for me, but not for thee" philosophy, which isn't the case. It'd be great if more ideologues had enough confidence in their own views to accurately depict and dispute the opposition's, rather than relying on strawmen.

[joezydeco]

I think the GOP's voting record is enough to show that they can publicly proclaim support for public infrastructure, education, civil rights, and healthcare but then do exactly the opposite when it comes to legislation.

[Prophasi]

Sure. But now you're contrasting the philosophy with what politicians actually do in office. If your argument is that politicians engage in lying and hypocrisy, I don't think you'll find many takers.

But I sincerely hope you'd assert the same (with tweaked parameters) for Democrats.

[joezydeco]

No, I believe I was contrasting the GOP's line

'I was on my own, I made it, and you can do the same.'

With the reality:

'I was on my own, I made it with the assistance of resources that government provides, and you can do the same if we actually wanted to support that mode of government in the future, but we don't.'

[twoodfin]

The Republicans have given their vision of how we build our future—they've said, 'I got mine, the rest of you are on your own'.

Now that's some thoughtful political discourse right there. Take the most draconian budget Republicans have even proposed, and you're still looking at trillions in spending for "the rest of you".

And anyone want to guess how big a % of the Federal budget "roads, bridges and schools" are? Next we'll have Federal candidates talking about firefighters. This isn't a serious argument.

[gruseom]

There actually could be a serious argument about firefighters, because they mostly don't fight fires anymore:

http://marginalrevolution.com/marginalrevolution/2012/07/fir...

Probably won't happen, though, because everybody loves them.

[cantankerous]

I agree with you on infrastructure spending except for one nuance. Usually telecom companies laying down infrastructure are given rights of way and easements that make their jobs much, much, less expensive. That is to say, if we lived in a private property, capitalist utopia, laying down thousands of miles of fiber would be orders of magnitude more expensive and possibly completely intractable. Government plays a role here by suspending private property rights in lieu of the added value to the public where infrastructure is concerned. If you were to figure in the money saved to infrastructure builders by government, then the spending numbers would like quite a bit different.

[twoodfin]

Usually telecom companies laying down infrastructure are given rights of way and easements that make their jobs much, much, less expensive.

Is it traditional for states and localities to just give this stuff away? If they're not accepting competitive bids for the right to lay fiber, they're leaving money on the table.

Certainly when it comes to things like wireless spectrum, the Feds have auctions for billions of dollars.

Here's a pre-dot com crash article that suggests at least for some areas these rights weren't given away:

http://articles.baltimoresun.com/1999-06-04/business/9906040...

[brown9-2]

real marginal tax rates that will approach 50+%

Can you elaborate on this? It seems to me that the proposal for restoring the highest bracket's marginal tax rate to what it was prior to 2001 would restore it to 39.6%.

[ojbyrne]

Adding on state tax gets you there. California, for example, has a top rate of 10.3%.

[fpgeek]

One small point: at the income level where the 39.6% bracket applies, you are almost certainly itemizing deductions (especially if you live in a state with an income tax). In that case, every dollar of state tax paid is deductible for federal purposes, measurably lowering the effective combined rate.

[twoodfin]

There's a good argument for eliminating that deduction, as it effectively grants high tax states and localities a subsidy from the residents of low tax states and localities.

That being said, the deduction doesn't take away the full force of the tax. Some quick math tells me that 40% federal + 10% state - the deduction is a 46% marginal rate.

Medicare/Medicaid FICA has been uncapped since the '90's, and adds 2.9% or 1.45%, depending on how you want to count the employer "contribution". Next year for top earners it goes up another .9% to help pay for ACA.

So I don't think claiming marginal income rates are approaching 50% at the high end is unfair. Does anyone doubt that a popular "fix" for Social Security will be to uncap that tax as well? Then we'd be talking 60%+ if you discount the accounting fiction of the employer contribution. Or are self-employed.

[ojbyrne]

Pretty important point. Thanks for the correction.

[crusso]

Do people just go through and downvote opinions they disagree with and upvote the ones they do agree with?

[jeffdavis]

I find the Republican perspective more convincing:

* Roads, police, schools, and other critical things that businesses need to thrive are mostly provided by state and local governments.

* Those critical things actually cost a pretty small fraction of total government spending.

* The exception to the above point would be the DoD, which could be seen as critical to the success of business, and DARPA which funds a lot of good research that businesses use. But is the lesson here that we need more defense spending? Or more DARPA spending? Or more basic research outside of the DoD?

* If the lesson is that we should have more funding for DARPA or basic research outside the DoD, then great. I'm 100% in agreement. It's a very small fraction of the budget now (I see DARPA is about 3.2B), so increasing it won't make a dent.

None of this seems relevant in the context of the very high federal spending right now. Very few of those dollars apply to the things businesses need to thrive.

And as for any moral argument, the people already paid for these things once, so it's not like something is owed any more than I still owe the grocery store for the food I bought. Yes, I will buy there again; and similarly, we shouldn't cut the government functions that are necessary for business to thrive.

But no, the Democrats at the federal level can't take credit for the police my city hired or the roads they built. And they can't use the success of DARPA to justify a bunch of things that don't resemble DARPA and cost much more money.

(For those wondering, I live in a Democrat-controlled city; and I have, when I felt it was appropriate, voted for city tax increases because I think they do a great job, notwithstanding an apparent monorail project[1]. So I'm not a "government is bad" kind of person.)

[1] That's a reference to a Simpson's episode, not meant literally.

[nathan_long]

Yes. If anything, the internet is a good example of the correct place for government and business. The initial research was publicly funded, and when it was up and running, it was handed off to private companies to manage, who compete to offer the best prices and service. (Of course, we'd all love to have more ISP competition, but that's a different subject.)

[cloverich]

While true of Republicans, imo the quoted argument is equally dogmatic. Its not as though its used as a simple painting of Government as symbiotic; today's liberal arguments take it much further. Something like the following: "Government invented the internet. And without government, NO ONE would have invented the internet."

That, imo, is silly. PEOPLE invented the internet. There's time's and places where private investors are better at backing these people, and times when government forces are necessary. These blanket assertions that pumping money into either (without direction) will lead to improved innovation and economy are reductionist and, to a large extent, fundamentalist.

Its not simple. Investment is tough, and both sides get it wrong more often than right (that's the nature of business).

[spamizbad]

> today's liberal arguments take it much further. Something like the following: "Government invented the internet. And without government, NO ONE would have invented the internet."

The "free market" versions of the Internet were the walled-gardens of AOL, CompuServe, Prodigy, etc. I'm not sure if you've ever used them, but I did and let me tell you - they all sucked compared to the Internet, even in 1994-95.

[cloverich]

IMO, that's an equally weak argument. "The free market's internet 20 years ago was terrible. Therefore, all conceivable free market plans for the internet could would have been draconion and awful."

To be clear, I'm not arguing the Government funds did not play the biggest role - or even that it wasn't the best solution available. It doesn't matter if it was. Im only arguing that pointing to an example of something invented under government funded research is not justification for blanket, undirected increase in government funding. But that's how that argument is used.