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The US does not use this information though.

I think this is generally true for a lot of policy research: the US today struggles to translate its staggering advantage here into policy-making. Politicians face incentives (from voters and donors) that encourage poor policy-making, and so we get poor policy-making. The parties, divided as they are, agree more with each other on economic policy than they do with consensus among American economists.

Also, the Democrats I'm referring to about telling us how to spend our money are the Hollywood types, not the politicians. They also don't blatantly tell us how to spend money, they use creative ways to say donate to this or that.

So advertising and advocacy? Almost everyone with a platform does this. Even you seem to have and share opinions about what others should do with their money.

There's no partisan component here. Joel Osteen (and his ilk) have opinions on where people's money should go. The "buy American" and buy local movements have not only shared their opinions but legislated them into national policy. I've gotten plenty of messages to donate to various right-wing political causes (e.g., every Trump email).

Moreover, why does this matter? You can tune out the Oscars. You can't just tune out trade restrictions.

it's going to be decades before I have a chance because of all the dept the US keeps racking up. It has to come from somewhere.

For now, we only have to worry about interest on that debt.

Down the line, this is solvable with improved policymaking. Just like how it's easier to pay off $30k of (household) debt if you make $100k/yr than it is to pay off $10k of (household) debt at $30k/yr, we can manage and alleviate the debt by growing the economy faster than the debt. This doesn't happen now (due to political reasons, like voters and lobbyists encouraging tax cuts and inefficient subsidies) but in general the debt is an overblown issue.

Straight out of college, I'm going to be hit with an overload of taxes, expensive living places, expensive food, expensive utilities, and it will continue to be a never ending downward spiral as long as Democrats have any control.

Taxes have been trending downward, and food prices have generally grown slower than inflation.

The growing cost of home-ownership is a supply problem that can be largely fixed with eased development restrictions. Expensive utilities can similarly be managed with efficient investments in infrastructure.

This, again, is not a partisan issue: the average Texan has a greater utility burden than the average Californian. If you keep reducing systemic problems to partisan battles and imputations of incompetence or ill intent, you'll only contribute to the fundamental problem in America's political system: voters and their broken worldviews create incentives that overall encourage poor policymaking (like America's recent shifts in trade policy and our immigration system which now includes actual lotteries).

As for California's perfect economy, it sounds like it will be much better on its own, am I wrong?

Yes. Any state exiting the Union would face economic repercussions because the Union creates free movement of goods, labor, and capital across 50 large and developed economies.

It would leave the US crippled if either left.

This contradicts your prior statements about not needing California.

California relies on imported water and energy.

This is called trade.

For the monetary values, California imports about $441 billion and exports about $178 billion. See a problem?

No. A negative balance of trade is not intrinsically concerning; it simply indicates that domestic demand consumes a higher share of domestic output. This is common in post-industrial service-based economies, like the United States in general.

Edited 9/9/2021 20:43:09

You're wrong
Everything you are bringing up is missing the point and simply does not mirror reality if you look into it
You are not even close to being correct and you need to take your time and actually look at what the issues are
Once you become open-minded you will see that every point you brought up is wrong and biased

If we lived in California, then our income tax would be 33.3%. If we lived in Texas, our income tax would be 24%. Both are ridiculous amounts for the return we get. Now in Germany with a tax rate of 42% for us, there is more return. Everyone gets similar free healthcare, everyone gets a similar retirement pension from the government, and there are few smaller payments from the government using taxpayer money. It is a very high tax rate, but you don't need save a shit ton of money for retirement, and healthcare isn't.as expensive as a gold mine. Most of the US taxpayer money goes to other people. For what, I'm not sure, I just know my family doesn't get much of anything.

How is it not bad that an entity requires a significant amount of outside help or contribution? Just wondering... Sure I have opinions on what is a bad way to spend money, but it's mostly common sense that should be taught in school. Some basic money management. Otherwise, if you don't effect me, I don't care what you do with your money. Now if you start telling me to donate, give, etc, then I'll tell you what I think you should be doing with your money. If you're allowed to voice opinions, I should be allowed to do the same about the same subject. Shutting people down immediately is not necessary, unless it's extreme (could've used that before WWII). Of course the cities and populated areas will have better employment opportunities. That's been true for centuries.

As for debt.... that's a simple money management skill. If you have a large amount of debt, pay it off, the proceed. Biden in his first 7 months of leadership has spent about $5.5 trillion. And apparently a few months back he proposed a $6 trillion plan. I'm shocked from words at the amount of money he has spent. Where is it coming from?? The US already started with $5.93 trillion in intragovernmental debt, so where did that $5.5 trillion come from?? And how is it going to be paid off? It has to come from the future. I'm in that future. Taxes and tariffs are the only way to do it, which means my generation will suffer. Unless we just keep accruing debt, in which case, whoever's lending it will stop.

@knyte

You make a point that California is rich, productive and doing good. Well, you're right.

I would say, it HAS TO BE rich because:

1. It's superior location - direct access to world trade from ports. Big advantage over landlocked states.

2. Superior climate. Mild climate is better than continental. Less extreme temperature swings.

3. Historic reasons. Because tech sector developed mostly there in the seventies.



But the real question that we want to ask you is:

1. Do you think the current high bureaucracy and strict regulation is a good thing or bad thing? A driver of progress or an obstacle?

2. Is it currently managed well or mismanaged?

3. Why people are leaving California? This is not a good thing.




My opinion is that California is doing good, DESPITE mismanagement because of it's location, smart population etc..... It has a greater potential and if California leaders addressed and solved many issues it would be EVEN RICHER, and attract more people and talent.

Edited 9/10/2021 19:34:08

We don't exactly want a Communist government to prosper and come out on top in the world.

Yes we do and USA as a country with just 4% of the world population has no right whatsoever to dictate how the rest of the planet should be.
Better pack your imperialism away before the 96% turn against you.

The USA isn't dictating anything at all, what are you talking about
China supports the North Korean dictatorship and is committing genocide of the Uyghurs
China is also trying to create an ethno-state based around the ethnic Hans in which they are already an overwhelming majority

Comminism never leads to the majority being the ruler of a nation, it always leads to one powerful group of politicians who get rid of their rivals by methods of murder or "making them go missing"

The USA might not have a perfect system, but it is streets ahead of anything a communist state can implement. You can have state laws that have a wide diversity, as comparison to the strict nationalized laws that are always applied in the communist states.

If given a chance to know what is on the USA, and if given a chance to move, an overwhelming majority would be migrating to the USA, and seldom anybody would be moving into those communist states.

TL;DR: Once you learn about macroeconomics, most of your questions will be answered. If you've already taken a course in macroeconomics, please switch schools.

then our income tax would be 33.3%. If we lived in Texas, our income tax would be 24%.

Income tax is only part of the picture. If I were looking at your parents' financial pictures in these states (and Germany), I would probably look at earning potential and cost of living first before income tax.

There's really no general solution because financial realities vary wildly, individually, and all 3 of the geographies you mentioned are quite large. I live in California because I expect my quality-of-life and cost-of-living-adjusted long-term financial outlook to be substantially better here than anywhere else. You might come to a different determination for your situation. It's not really apples-to-apples: e.g., in different places you might or might not need to buy a car or have different options for shelter with different cost and return profiles.

Most of the US taxpayer money goes to other people.

What "other people" do you mean? Most US federal spending just goes into Social Security, Medicare, and similar programs.

You can explore how federal tax money is spent at: https://usaspending.gov/explorer
You can check out the CA state budget summary at: http://www.ebudget.ca.gov/2021-22/pdf/Enacted/BudgetSummary/FullBudgetSummary.pdf

One lesson from Brexit is that people simply remain unaware of how government spending impacts them: not everything is as visible or clear a benefit as food stamps or state health insurance. Conversely, the costs of some government benefits- e.g., rent control- are also not visible to people.

---

How is it not bad that an entity requires a significant amount of outside help or contribution?

Imports are not subsidies.

A balance of trade is simply that: exports less imports. It does not mean dependency or economic failure.

You import from other places when they can provide a good or service at a lower opportunity cost than you (https://www.investopedia.com/terms/c/comparativeadvantage.asp). For example, building an iPhone assembly line in Cupertino, California, would be a gross misallocation of resources. There's plenty of nuance here (you can find lots of thoughts on trade deficits and their trade-offs), but if you shut down some inefficient export-oriented economic activity for efficient non-exporting economic activity, you would grow the economy, increase welfare, and yet grow the trade deficit. It does not make sense to pursue a trade surplus as its own end (https://www.igmchicago.org/surveys/trade-balances/).

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If you have a large amount of debt, pay it off, the proceed.

This is unsound advice: smaller debt and more manageable debt are not always the same. In terms of personal finance, this means you should not hold off on 401(k) contributions until you are out of debt. And sometimes- less often so than for governments, because consumer debt tends to behave differently than the debt governments accrue, but sometimes- it can make sense to take on or increase debt in order to invest. Like I said earlier, what matters is growing your wealth faster than your debt.

In the case of governments (which we should be careful not to assume behave the same as households), one example that comes to mind is the austerity phase of the Greek debt crisis. When implementing IMF-mandated austerity measures, Greece reined in its debt- but its GDP shrank by 25% (https://en.wikipedia.org/wiki/Greek_government-debt_crisis#Effect_of_applied_programmes_on_the_debt_crisis). Consequently, the debt:GDP ratio went from 125% to 180%, unemployment skyrocketed, and life in Greece got worse.

Taxes and tariffs are the only way to do it, which means my generation will suffer.

If you stop looking at debt as an absolute figure and start looking at it from the perspective of debt relative to GDP, you'll understand the alternatives here.

I strongly suggest taking a course in macroeconomics at some point in your education.

Edited 9/10/2021 23:44:58

TL;DR: People aren't real.

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I would say, it HAS TO BE rich because:

1. It's superior location - direct access to world trade from ports. Big advantage over landlocked states.

This does not guarantee success, but of course there has been an observed difference in economic outcomes for landlocked vs. coastal economies. However, Texas and Florida are also coastal states. California is simply one of many states with ports.

2. Superior climate. Mild climate is better than continental. Less extreme temperature swings.

Spain, Italy, Portugal, and Greece are in the same climate zone (Mediterranean).

3. Historic reasons. Because tech sector developed mostly there in the seventies.

Why did it develop in California? California has been able to attract and cultivate a highly-product workforce. There's a reason for this, and at least some of it goes to strategic government and private investments (especially the wildly underappreciated American research university system).

California's economy, furthermore, is highly diversified.

1. Do you think the current high bureaucracy and strict regulation is a good thing or bad thing? A driver of progress or an obstacle?

You will have to be more specific. I see some California laws as beneficial, for example:

1) Drivers of investment in infrastructure and ease of transportation
2) Employment laws that serve as bulwarks against the gig economy's push toward replacing employees with independent contractors
3) Investment in post-secondary research education (the University of California + CSU + Cal Poly + CCC system is unparalleled domestically)

I see others as harmful, especially housing and development restrictions. Just changing housing regulations in NYC and the Bay Area could lead to a double-digit long-term improvement in nationwide GDP (see: https://www.econlib.org/a-correction-on-housing-regulation/).

In general, many California development priorities make this an area with desirable quality-of-life. The little things- parks, walkability, bike lanes, reliable public transport, sensible government protections (e.g., extended COBRA coverage, restrictions on security deposit deductions, limitations on the fees car dealerships can charge)- make this place well worth it for me. This does not mean that others will enjoy living here, especially if they cannot afford to.

Keep in mind that California is bureaucratic and strict by American standards. Compared to Canada and most of civilized Europe, this is still the Wild West with tiny tax burdens.

2. Is it currently managed well or mismanaged?

This depends on the standard. California is not optimally managed. There are ways in which I strongly disagree with the state government (see: policies around awarding of contracts, which have been prone to abuse and led to delays and cost overruns in infrastructure projects).

I would not trade California's state government, however, for the state government of any other US state- especially not that of Texas.

3. Why people are leaving California? This is not a good thing.

Because they can't afford to live here. CA had a net migration loss of about 1 million people over a decade, during which the state population still grew by 2-3 million.

Not every place needs to be affordable for everyone. While California certainly should roll back its asinine drivers of high housing prices (which is hard to do when many of your voters own million-dollar cottages and don't want to lose out on those investments), there are- past a certain point- trade-offs when you try to make a place livable for those who cannot compete economically.

As the saying goes: if you are poor in Europe, you will be really poor in America. If you are rich in Europe, you will be really rich in America. While part of this has to do with American inefficiencies, other parts of this come from Europe lowering the ceiling to raise the floor.

Personally, if you create a place like the SF Bay Area that attracts a flood of people to whom US$100k is no big deal, you are bound to price out people.

leaders addressed and solved many issues it would be EVEN RICHER, and attract more people and talent.

My opinion is that the leader-focused model of politics is wildly counterproductive and responsible for present inefficiencies.

In a democratic society, politicians are simply those who can get elected and keep getting elected. They must either respond to incentives- do what it takes to win the next election- or find themselves replaced by someone who will.

So I see nothing special about Gavin Newsom, Nancy Pelosi, Chesa Boudin, or any of these other elected leaders. At least I don't think they matter as people. They're just humans fulfilling jobs responding to the incentive models of those jobs.

California has its housing policies not because Gavin Newsom is malicious or stupid or incompetent but because that's how the incentives shake out. We have housing restrictions because entrenched interests- people with votes and money- create incentives that make it politically costly/impossible to make it easier to improve the housing supply in California.

Ultimately, however, the power resides in votes. Money has influence in politics because it affects votes. Redistricting, restrictions, etc., also ultimately manifest impact through votes. The media has power because it, too, affects votes.

Voters are in a position where we can change these incentives for politicians and achieve policies we desire. But we don't, because we're not real either. We create a lot of bad incentives, and just as you've provided a counterfactual where "better" leadership would lead to better results, the same applies to voters: low voter appetite for and high opposition to certain policies (e.g., the opposition to free trade, the fear of open borders- https://openborders.info/double-world-gdp/) are similarly responsible for our world not being considerably better.

We also respond to social incentives that drive our own beliefs- you're more likely to challenge your own beliefs when you have people around you that you like or want to be like who disagree with those beliefs, and more likely to continue believing what you believe (without even being conscious of your assumptions) when your social neighborhood shares those assumptions. This is why, although we experience logic, we don't really live it. People experience reasoning through their views on poverty and taxes, for example, but in spite of this you can predict those views based on demographic profiles.

It's just a system. Until we put in the effort to understand how it works and why it behaves as it does and where to tweak the incentives, we can't really change it. Only fruitlessly blame people, vote them out, vote new ones in, etc., because we forget that people aren't even real. We swapped out Trump for Biden and thought it solved the problem when r*rals still exist out there, subsidized and un-eradicated.

Edited 9/10/2021 23:56:48

I read and appreciate your response and that you agree about some of my points.


Also, if you write so much in one post it might scare people off from talking because they're overwhelmed with text :o Just saying it can be real thing.

Also, if you write so much in one post it might scare people off from talking because they're overwhelmed with text :o Just saying it can be real thing.

That's intentional. It's tiring to keep replying and nice to filter out people with low interest.

You make good points. I'm not basing any of my information in macroeconomics, only in finance. I do still think the US needs to hold off on a spending spree though. Earlier for "other people", I meant that the middle class's taxes don't usually get them much other than social security, which in itself isn't very much. The poorer people get most of the governmental benefits. I'm going to use college scholarships for example. My family has a high credit score, steady income, and apparently I'm excelling academically, but I'm not going to receive any scholarships from the government, and neither will my siblings. Meanwhile, people making less than us, have a low credit score, and are average to below average academically are receiving scholarships. People making less than us obviously is a reasonable reason to award a scholarship, but the other two aren't.

That was just an example. Both California and Texas pay more taxes to the government than they receive back. Both have the ability to survive on their own. Both would have very different types of government. The reason I dislike California and have anger towards it is because of its politics and Hollywood people. It's also the gathering place of the "emotionally fragile" and "poor me"s that sound like toddlers. All this while also having a crap ton of money, not wanting to give it away, but then saying how everyone should. NYC and Chicago also have the politics I dislike, but California takes it to the top. California is becoming a Communistic society. You're either poor or rich, and the rich have manipulated the poor. All the power is in the elite. Republicans are said to be authoritarian, but I would look at the Democrats. Why else would a blue president have signed the most executive orders of any other?

That was off topic, but California is a blue breeding ground. I'd say the red states are some of the least authoritarian. This conversation went to economics, which plays a part, but money doesn't solve everything.

I meant that the middle class's taxes don't usually get them much other than social security

Which middle class? Everyone but the obviously rich and obviously poor will claim to be middle class. The bulk of the social safety net benefits go to the middle 60% of the income distribution, though.

Meanwhile, people making less than us, have a low credit score, and are average to below average academically are receiving scholarships.

Need-based grant aid heavily subsidizes the gap between your estimated family contribution (EFC) and cost of attendance. If you're attending an institution where that gap is small, then of course you should not expect much (if any) grant aid; if you're attending one with a high cost of attendance, then you will find plenty of middle class students receiving need-based grant aid.

You could get caught in the 'squeeze' where cost of attendance feels less manageable for you than for socioeconomically disadvantaged peers (whose needs may be covered fully by scholarships) or wealthy peers (who can pay whatever), but that's a consequence of how university pricing works in the US. The current model creates a 'pay-what-you-can-afford' environment, which in turn creates 'charge-what-we-can' behavior (https://mattbruenig.com/2013/05/17/college-price-discrimination-is-impressively-effective/) and an environment rife for exploitation by make-work middleman jobs (when you're in college, notice how much administrative staff there is).

Discourse around college scholarships is like discourse around better preparing Americans to file their taxes: it forgets that the problem its trying to solve doesn't make sense. Just like how it's silly that the average American has to file taxes (for 90%+ of us, we're just telling the IRS what they already know), it's silly that college costs so much. We should tackle the root cause.

It's also the gathering place of the "emotionally fragile" and "poor me"s that sound like toddlers.

Who are you talking about?

Why else would a blue president have signed the most executive orders of any other?

You mean FDR? Well, for one, he had four terms and presided over the Depression and WW2. On the whole, the partisan distribution of executive orders has been about 50/50. Executive orders also make for a pretty poor measure of authoritarianism: would the involvement of Congress suddenly make an authortarian policy not authoritarian? EOs just happen when the president isn't able to get policies through Congress, authoritarian or otherwise.

You're all wrong
Everything you are all bringing up is missing the point and simply does not mirror reality if you look into it
You are all not even close to being correct and you need to take your time and actually look at what the issues are
Once you all become open-minded you will see that every point you brought up is wrong and biased

will move to california if I can, would recommend 10/10

RIP to the 3000 people who died on 9/11 and to the 1.5 million who died from its effects

Not FDR, Biden takes the prize. The emotionally fragile and poor mes are the ones who bash other people for their misfortunes and tell their supposed sob stories wanting donations and people to side with them about nonsense. Those who if told no would lash out and make a tantrum because their feelings were hurt. Middle class is defined anywhere between $42k and $250k as far as I can tell. These numbers are all definitions combined. Executive orders are things signed into law without the consent of the public, house, or senate. That is exactly what a dictator does. If something is passed in Congress, then there was 535 additional people to have a say in the law.