Maggie's Farm

We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.

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Friday, July 15. 2011

QQQ

"The government drag on the economy is the Net Present Value of expenditures minus transfer payments" - 1st year MBA Macro Econ


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Posted by Bird Dog in Quotidian Quotable Quote (QQQ) at 13:51 | Comments (4) | Trackbacks (0)

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Hey, that sounds familiar!

Once you accept that principle, the tax versus borrow debate becomes secondary to controlling spending.
#1 NJSoldier on 2011-07-15 16:12 (Reply)
Therefore, if transfer payments rise to a sufficient level, government operations are a net benefit to the economy.

In a debt-based economy like current ones, the trick is in figuring Net Present Value of spending. When interest is low and payments are long, NPV of debt is lower than NPV of interest. But that ratio goes the other way when gov’t policy impedes real innovations and real efficiency. The costs of risk and malinvestment are rarely added to the equations.
#2 foxmarks (Link) on 2011-07-16 04:32 (Reply)
The problem with transfer payments is that the federal government is the most ineffecient charity in the world. By the time the IRS collects our money and a various federal agencies pay their 2 million civil servants, only a trickle makes it back into the economy.
#2.1 NJSoldier on 2011-07-18 07:34 (Reply)
No wonder so many are dirt-ignorant. Regulatory costs are also a drag on the economy.
#3 John on 2011-07-17 03:40 (Reply)

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