Blog on the Run: Reloaded

Wednesday, July 25, 2012 8:04 pm

You really didn’t build that.

Not by yourself, anyway, says John Scalzi:

I am financially successful now; I pay a lot of taxes. I don’t mind because I know how taxes helped me to get to the fortunate position I am in today. I hope the taxes I pay will help some military wife give birth, a mother who needs help feed her child, help another child learn and fall in love with the written word, and help still another get through college. Likewise, I am in a socially advantageous position now, where I can help promote the work of others here and in other places. I do it because I can, because I think I should and because I remember those who helped me. It honors them and it sets the example for those I help to help those who follow them.

I know what I have been given and what I have taken. I know to whom I owe. I know that what work I have done and what I have achieved doesn’t exist in a vacuum or outside of a larger context, or without the work and investment of other people, both within the immediate scope of my life and outside of it. I like the idea that I pay it forward, both with the people I can help personally and with those who will never know that some small portion of their own hopefully good fortune is made possible by me.

So much of how their lives will be depends on them, of course, just as so much of how my life is has depended on my own actions. We all have to be the primary actors in our own lives. But so much of their lives will depend on others, too, people near and far. We all have to ask ourselves what role we play in the lives of others — in the lives of loved ones, in the lives of our community, in the life of our nation and in the life of our world. I know my own answer for this. It echoes the answer of those before me, who helped to get me where I am.

Thursday, September 22, 2011 9:30 pm

The wisdom of crowds and the U.S. Postal Service

Filed under: Cool! — Lex @ 9:30 pm
Tags: , , ,

People are complaining about the fact that the Postal Service loses money and is an Internet Age anachronism, even though the Constitution requires that the government provide, you know, postal service. Hmmm. What to do …

Elevated from Balloon Juice’s comments section:

Commentor MikeJ, via Cole’s earlier Netflix post:

Hmmm. Congress complaining that the Post Office isn’t a profit centre, even though it’s mandated in the constitution. Not enough broadband available. PO losing customers because nobody except junk mailers use it any more.

I say let the USPS lay fibre to the curb and [forget]  Comcast.

To which commentor Omnes Omnibus replied:

Win. Jobs… Broadband access… Constitutional mandate (arguably wrt this)… Screwing over cable companies… Yeah, I like it.

And commentor Judas Escargot added:

One could make an argument that fiber/copper fits the definition-in-spirit of a ‘Post Road.’

Hmmm. I particularly like the “[forget] Comcast” part.

UPDATE: Edited for clarity.

Thursday, July 14, 2011 8:56 pm

Are you a fan of efficient government? Want to improve the economy? Read on.

We all know that this country has an enormous backlog of infrastructure projects, from water and sewer to Internet, that we need to get to work on if we’re going to be globally competitive down the road. (And for those who don’t know, here’s a primer from those wild-eyed liberals at the American Society of Civil Engineers.)

Now, as with enormous backlogs of pretty much anything, paying for this stuff is going to be hugely expensive. Getting much of it done at any one time inevitably would require government borrowing. At the moment, that’s not a popular idea inside the Beltway. But if you really want government to be run like a business, what do you do? You identify current and likely future needs. If possible, you wait until the cost of borrowing money goes way down, and you put your jobs out to bid when high unemployment means wages are stagnant so you can get the most bang for your buck.

A time like now, in other words. Unemployment is high (and rising again). People need work and are more willing to work cheaply than they otherwise might have been. And the cost of borrowing? Well, here’s the real kicker.

Karl Smith, an assistant professor of public economics and government at UNC, makes a counterintuitive but deeply important point: Because the real (i.e., inflation-adjusted) rate of return on 5-year Treasury notes is currently negative, it would be cheaper to do the work now, with borrowed money, than it would be to pay cash later on:

… real rate of return on government 5 year  securities is now negative. You want to stop and absorb that because I think it’s a bigger deal than most people realize.

Suppose the government had two choices. It could either pay for infrastructure improvements as it went along out of tax revenue or it could borrow money build the infrastructure now and then repay the money with tax revenues.

Ordinarily the question would be, does the advantage of building quickly outweigh the cost of the interest.

However, right now the interest cost is negative. The government saves money by borrowing now rather than waiting and paying cash. Let me say again because I have noticed that this goes against so much intuition that its hard for many people to wrap around when I first say it.

The government will wind up paying more if it decides to pay cash for a project than it will if it decides to borrow. This is irrespective of the return on the project itself or the advantages of avoiding delays or anything like that. It is simply that the cost of borrowing is negative.

It is cheaper than paying cash.

Given that fact, plus the immediate stimulative effect to the economy that infrastructure would have and the foundation for future wealth creation that such projects would lay, we would be nuts not to borrow, and borrow big, right now, for infrastructure projects.

Unfortunately, as the ongoing debt-ceiling crisis has shown, a nontrivial percentage of the people who make these decisions really are nuts.

(h/t: mistermix)

Thursday, October 7, 2010 8:55 pm

You keep using that word phrase. It does not mean what you think it means.

In general, I hold in contempt people who say government ought to be run more like a business, not only because businesses and government have different ends and therefore are likely to need different means, but also because a lot of businesses, especially large ones, are crappily run.

But if I’m going to be intellectually honest, I have to admit that there can be some merit to this view. The problem for people who think this, however, is that they associate “running government more like a business” solely with a fatter annual bottom line. Running a business well, however, sometimes means spending more in the short term, and even going into debt, to take advantage of growth opportunities and generally ensure long-term viability:

People say that the government should be run more like a business. So imagine you are CEO of the government. Your bridges are crumbling. Your schools are falling apart. Your air traffic control system doesn’t even use GPS. The Society of Civil Engineers gave your infrastructure a D grade and estimated that you need to make more than $2 trillion in repairs and upgrades. [And your Internet is nowhere near world-class — Lex]

Sorry, chief. No one said being CEO was easy.

But there’s good news, too. Because of the recession, construction materials are cheap. So, too, is the labor. And your borrowing costs? They’ve never been lower. That means a dollar of investment today will go much further than it would have five years ago — or is likely to go five years from now. So what do you do?

If you’re thinking like a CEO, the answer is easy: You invest. You get it done.

So we’ve got good news and bad news.

The good news is, the federal government is going to spend $50 billion to get (some of) it done.

The bad news is, $50 billion is only a tiny fraction of what we need to spend. It will neither make much of a dent in the backlog nor create many jobs. But our politics have become so damned dysfunctional that $50 billion in the largest amount that can even be discussed publicly, let alone have a chance of passing; meanwhile, Newt Gingrich is running around saying that the voters’ choice in November is between “paychecks and food stamps.” This is what passes for serious thinking from the politician and potential presidential contender widely considered, by people who are not me, to be the brightest, most visionary candidate in the GOP stable.

Jesus wept. And so will tens of millions of un- and under-employed Americans and their families.




Tuesday, June 1, 2010 8:12 pm

Without so much as a burp …

… a 100-foot-wide, 200-foot-deep sinkhole opened up in Guatemala City and swallowed a three-story building. Blame Tropical Storm Agatha and ancient drainage systems.

It’s not like our own infrastructure is in such great shape that we can point fingers, either.

Saturday, February 13, 2010 11:52 pm

A lesson we can steal from China

Filed under: I want my money back. — Lex @ 11:52 pm
Tags: ,

If you want to create jobs, then create jobs.

Want to stimulate the economy?

The American Society of Civil Engineers has some excellent suggestions. Not on their list — probably not because they don’t know about it but because it’s not really within their purview — is the U.S. Internet infrastructure, which also needs significant work with respect to both speed and security to match progress in more than a dozen other industrialized countries (as well as a number of Third World ones) whose networks are superior to ours.

Where would the $2.2 trillion come from? It could come from a number of places (that is to say, a combination of various revenue increases and spending cuts), but this kind of expenditure is, arguably, one of the few kinds for which it actually makes sense to borrow money. The projects would put a lot of people back to work pretty quickly, and the resulting capacity would lay the groundwork for the kind of long-term prosperity that is the only thing that will bring the deficits back down.

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