How high should taxes be? High enough to cover expected outlays going forward — but no higher.
That’s because any additional revenue would be used to pay down the federal debt, which is a bad idea. It was almost surely a mistake to run up this much debt in the first place, but now that we’ve got it, the best thing to do is to keep it forever.
Every $100 in outstanding debt commits the government to making payments with a present value of $100, and hence to collecting tax revenues with a present value of $100. In a world where the interest rate is 3%, the options include collecting (and paying off) $100 immediately, or $50 this year and $51.50 next year, or $11.38 a year for ten years running, or $3 a year forever. Because deadweight loss (i.e. the economic damage due to the disincentive effects of taxes) is roughly proportional to the square of the tax rate, it turns out that the latter — the policy of paying interest forever without ever making a principal payment — is (at least roughly) the policy that minimizes the present value of deadweight loss.
Take Van Halen, for example. On the surface, the group is famous not only for its music but also for stunts such as trashing green rooms over the presence of brown M&Ms, and it’s easy to write off such behavior as simply being symptomatic of a 1980’s rock diva mentality. In reality, however, the brown M&Ms served an important purpose from a contracting perspective.
Think about it- wouldn’t it be nice to have an easy way to observe whether your counterparty has paid attention to all of the details of a complicated contract? As it turns out, the brown M&Ms served exactly this function. [. . .]
Since Van Halen’s (long) tour rider stipulated M&Ms with the brown ones taken out, the group knew that they needed to double check a lot of safety items for the show if they saw brown M&Ms (or no M&Ms, for that matter) in the backstage area. They also knew that they could feel comfortable that the contract provisions had been fulfilled if they saw a bowl of M&Ms with the brown ones removed. (I’m pretty sure that trashing stuff was for some combined purpose of making the incident memorable and entertaining one’s self.) This is pretty smart, since it’s far more efficient to use this as a signal (the canary in the coal mine, in a way) rather than go around and check everything at each show. It’s even smarter that the signal was crafted in the fashion of typical rock star douchebaggery so as to not arouse suspicion.
Michael Bradshaw‘s letter to the editor in the most recent Libertarian Enterprise alerted me to a possible source of interesting and unusual do-it-yourself books and pamphlets:
“The Lindsay” of Lindsay’s Books has announced his retirement “in 2013 or earlier” and the closing of his book store.
For many decades Mr. Lindsay has been the premier supplier of technical books to the do-it-yourself crowd, machine shop mavens, foundry sand-crabs, eccentrics, nut cases (like me) and geniuses at large (like “Uncle Dave” Gingery).
It ain’t all Uncle Dave.
He (Lindsay, not Dave) has titles from all over and back to the mid nineteenth century. He used to have De Re Metallica by Agricola in the Hoover English translation, but I don’t know if it is still cataloged. There are tech-school text books, how-to volumes from some of the best industrial arts guys around and collections of articles from technical manuals and magazines back to the early twentieth century. Get a 1940’s version of “How to Run a Lathe” by the South Bend Machine Tool Company.
His titles cover a plethora (really!) of stuff, such as:
Machine shop practices, building the major tools from scratch — from scrap (the Gingery series), building EDM machines and other shop tools and techniques.
Foundry tools and methods. Make your own molding shop and blast furnaces for the back yard. Fuel them with charcoal, propane or natural gas. Pour castings in aluminum, zinc and pot metal, copper alloys, iron alloys. Design and build centrifugal fans to power your crucible and cupola furnaces. Make your own crucibles. Dig ore for your cupola furnace, with a sharp stick, while wearing a leather breech-clout, a tie and a top hat! (OK, that last one was a joke. Lame.)
Sheet metal shop tools and methods. Make your own brake and slip-roll. Books of projects. Start a local sheet metal fabricating business.
Make electric generators, modify alternators, re-build or modify motors, make electro- and permanent magnets. Make radios from scratch. Emulate Nicola Tesla. Short circuit yourself and go up in a puff of smoke!
Learn about old-time chemistry. Set up a chem-lab. Screw up and dissolve, stain, burn, poison, blow-up and generally kill yourself in the most ingenious ways! Go up in another puff of (green) smoke!
Make wooden toys for kids. Make ship models for yourself.
Make steam, sterling, turbines and other kinds of engines. Build boilers from scratch and blow yourself (and the garage) up again! Build locomotives from scratch. Well, “maybe” on that last one.
Make wind and water turbines to power your generators or shop. Recycle waste oils.
Other stuff that I forgot to mention.
Basically, if you drop a bunch of money (including postage) on Lindsay, he will show you how to make a very complete industrial revolution. You may even have some fun. While killing yourself in the most ingenious ways. Count your fingers at the end of the day.
[. . .]
Get a catalog for $2 from Lindsay at lindsaybks.com Order some books. Do it NOW while you still can. The complete machine shop from scratch series is available in a package deal at a discount. There are some other package discounts. Check out the trauma center and links to other book dealers. Some are available on Amazon.com, but not many.
You can also buy Uncle Dave’s books (and his son Vince’s, too) direct, at the Gingery book store.
Note: I just received a note from Lindsay Books. Here is the pertinent part:
“In the future, you may want to visit our new associate e-store:
Your Old Time Bookstore youroldtimebookstore.com
YOTB’s site offers all books printed by Lindsay and provides decline/error notification before processing…
An interesting article in the Wall Street Journal looks at the documented phenomenon of rapidly rising IQ in modern humans:
Advanced nations like the U.S. have experienced massive IQ gains over time (a phenomenon that I first noted in a 1984 study and is now known as the “Flynn Effect”). From the early 1900s to today, Americans have gained three IQ points per decade on both the Stanford-Binet Intelligence Scales and the Wechsler Intelligence Scales. These tests have been around since the early 20th century in some form, though they have been updated over time. Another test, Raven’s Progressive Matrices, was invented in 1938, but there are scores for people whose birth dates go back to 1872. It shows gains of five points per decade.
In 1910, scored against today’s norms, our ancestors would have had an average IQ of 70 (or 50 if we tested with Raven’s). By comparison, our mean IQ today is 130 to 150, depending on the test. Are we geniuses or were they just dense?
[. . .]
Modern people do so well on these tests because we are new and peculiar. We are the first of our species to live in a world dominated by categories, hypotheticals, nonverbal symbols and visual images that paint alternative realities. We have evolved to deal with a world that would have been alien to previous generations.
A century ago, people mostly used their minds to manipulate the concrete world for advantage. They wore what I call “utilitarian spectacles.” Our minds now tend toward logical analysis of abstract symbols — what I call “scientific spectacles.” Today we tend to classify things rather than to be obsessed with their differences. We take the hypothetical seriously and easily discern symbolic relationships.
A post at his blog looks at an economic concept that is becoming familiar to more of us than ever before (even in the middle of a long-term economic crisis):
There’s a concept in economics called the diminishing marginal utility of money. Loosely put: if you give a £20 bill to a homeless dude, it will make his day — it’s worth a bunch of hot meals or a hostel bed for a few nights. If you give £20 to an average wage earner, it’s nice but not a game-changer: it’s worth a couple of cinema tickets or a round of drinks at the pub. And if you give £20 to a billionaire they probably won’t know what to do with it — they have employees to carry the money around for them, and anyway, they earn more in the time it takes to open their wallet and stash the bill than the £20 note is worth. They’re losing money by taking it!
Money. The more of it you’ve got, the less useful any additional increment becomes. And you don’t have to be a millionaire to get a handle for this.
These days, I’m in the weird position where almost all the stuff I would want to buy with any additional income is either stuff I can simply buy right now … or it isn’t available at any price.
An interesting post at the official website for Prime Minister David Cameron talks about former Prime Minister Margaret Thatcher and her relationship with the Joint Intelligence Committee during her time in office:
Soon after taking office a new Prime Minister receives special briefings from the Cabinet Secretary. One is on the ‘letters of last resort’, which give instructions to the commander of the British submarine on patrol with the nuclear deterrent, in the event of an attack that destroys the Government. Another briefing outlines the structure and control of the intelligence machinery, including the Joint Intelligence Committee (JIC) in the Cabinet Office. Sir John Hunt, the Cabinet Secretary in 1979, briefed Margaret Thatcher on the intelligence structure, including counter-subversion activities, the day after her election victory of 3 May.
Thatcher had started a programme of visits to Government departments to see first-hand what some of the 732,000 officials inherited from James Callaghan’s administration actually did. In September, during a routine briefing by Brian Tovey, the Director of GCHQ, Thatcher showed great interest in the way in which intelligence was collated and assessed by the JIC, stressing that assessment should be free from policy (or political) considerations. She also expressed a wish to attend a JIC meeting. It would be the first time a Prime Minister had attended the JIC since its creation in 1936.
It fell to Sir John Hunt, a former Secretary of the JIC, to make the arrangements, but there were complications. First, the JIC Chairman, Sir Antony Duff of the Foreign and Commonwealth Office (FCO), had also been made Deputy Governor of Southern Rhodesia (now Zimbabwe) after the British Government assumed direct rule of the rebellious colony. He was a key participant in the Lancaster House Conference, aiming finally to settle the Rhodesian problem, and could not be sure to attend the JIC until after its conclusion. Second, the JIC normally met on Thursday mornings in 70 Whitehall, which was also when the Cabinet met in 10 Downing Street, so a special JIC meeting would need to be arranged.
TED, the “Davos of Silicon Valley”, which has refashioned itself into a global media company selling ideas in many forms, can often seem like it’s caught in an endless cycle of pretension and self-regard; an echo chamber in which people suckle polished platitudes from each other and call it deep thought. It’s also an echo chamber that – let’s face it – many people with soapboxes not-so-secretly wish they’d been invited to.
Evgeny Morozov, internet-famous hectorer of optimists, was pushing at an open door when earlier this month he published a long article in The New Republic hectoring TED for intellectual vapidity and pretension, peppering his piece with highfalutin’ philosophical allusions. The piece duly went viral, and thus it became official: contempt of TED is now hip, even de rigueur. Like owning an iPhone, or being enthusiastic about TED three years ago.
But hang on a second. Is TED noxiously pretentious? Yes. Is TED superficial? Of course. Does TED peddle a slightly messianic ideology even as it claims to be above ideology? Sure. But none of those things should obscure the things that are truly great about TED. Because TED is great. No, hear me out.
An interesting post at the Hit and Run blog by Jacob Sullum:
Last year, I was surprised to see Allen Frances, who headed the panel that produced the current edition of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders, tell Gary Greenberg: “There is no definition of a mental disorder. It’s bullshit. I mean, you just can’t define it.” This week Frances surprised me again, declaring in his contribution to a Cato Unbound debate about psychiatric coercion that “mental disorders most certainly are not diseases.” Rather, he says, they are “constructs” that may justify treating people against their will as “a last resort.” Go here for my response. But start with Jeffrey Schaler’s opening essay, where he lays out the Szaszian position on mental illness, which Frances, the lead editor of psychiatry’s bible, says he basically agrees with, although “Schaler and Szasz go way too far in their total rejection of any need ever for involuntary treatment.”
Chris Brandrick on the first civilian recruitment drive for Martian colonization:
Just as NASA’s latest rover prepares to land on the surface of Mars, one Dutch company is looking to up the ante, with plans to send humans to the distant red planet. But before you sign up for travels to faraway lands, you may want to take note that the trip is a one-way deal, meaning you’ll never be able to return home to Earth.
Mars One, the ambitious company behind the planned mission, is hoping that a number of brave civilians will be willing to embark upon the mission to be the first to occupy the planet.
The company, founded by Bas Lansdorp, wants to send a number of humans to live on our neighboring planet indefinitely by 2023. The timeline for the mission will see Mars One send out a communications satellite in 2016, with a rover being sent in 2018 to find a suitable site for a settlement. Once the company finds a suitable location, it’ll send settlement units to Mars in 2020, which the existing rover will then set-up.
Once it gets the settlement established, Mars One hopes to send a small crew that would leave Earth in December of 2022, and arrive in April of 2023.
Visiting Mars would be fantastic, but I think I’ll wait until a return booking is possible.
According to Steven Landsburg, the answer is to cut capital taxes, and he makes a good case:
There are only three things you and I can do to make the future world a better place. First, we can consume less, leaving more resources behind. Second, we can work harder, planting trees, building factories and writing poems that will live on after we’re gone. Third, we can innovate, advancing science and technology so that our children’s children’s children can make better use of the resources they inherit.
As it happens, there’s one key policy variable that drives all three of these things, and that’s the tax rate on capital income (which includes interest, dividends, corporate income and capital gains). Capital taxes are a disincentive to save, and when people don’t save they consume instead. Capital taxes are a disincentive to work and a disincentive to innovate.
This is not a plea for lowering taxes in general, and it’s not a plea for making the tax system either more or less progressive. (If you want to soak the rich, there are plenty of things to tax besides capital.) As a matter of fact, this isn’t even a plea for lowering taxes on capital. It’s simply an observation that if your goal is to leave a better world for our descendants, then your best bet is to support lower capital taxes.
A French petition calls for the return of the British Crown Jewels to Angers, in compensation for the execution of the last Plantagenet pretender to the throne in 1499:
Angers, in the Loire valley, was the capital of Anjou province and the geographical base of the Plantagenets, who ruled England from 1154 until 1485, providing some of the most celebrated monarchs in British history, including Richard the Lionheart and Henry V.
But when Edward Plantagenet, the Earl of Warwick, was executed for treason in the Tower of London in 1499, the house’s legitimate male line came to an end. “As redress for the execution of Edward, Angers today demands that the Crown Jewels of England be transferred to Angers,” reads a petition posted on the city’s official website.
Recalling 25-year-old Edward’s “unfair and horrible death” at the hands of henchmen working for Henry VII, England’s first Tudor king, the city believes it is owed an apology and 513 years’ worth of compensation.
Tim Worstall explains the one condition under which Her Majesty should accept the French claim:
Happily stick the Crown Jewels in Angers.
Immediately after the union of the Angevin Empire with the United Kingdom.
We’ll have the Duchy of Normandy back too if you don’t mind. And Brittany (they are Bretons after all).
Francois Hollande can keep the Ile de France, the bit we didn’t have back then.
This time around let’s do European integration properly eh?
I don’t mean playing the game for that length of time (I’m sure there are still fans who do that now and again), but playing the same session for that long:
I’ve been playing the same game of Civ II for 10 years. Though long outdated, I grew fascinated with this particular game because by the time Civ III was released, I was already well into the distant future. I then thought that it might be interesting to see just how far into the future I could get and see what the ramifications would be. Naturally I play other games and have a life, but I often return to this game when I’m not doing anything and carry on. The results are as follows.
The world is a hellish nightmare of suffering and devastation.
There are 3 remaining super nations in the year 3991 A.D, each competing for the scant resources left on the planet after dozens of nuclear wars have rendered vast swaths of the world uninhabitable wastelands.
-The ice caps have melted over 20 times (somehow) due primarily to the many nuclear wars. As a result, every inch of land in the world that isn’t a mountain is inundated swamp land, useless to farming. Most of which is irradiated anyway.
-As a result, big cities are a thing of the distant past. Roughly 90% of the worlds population (at it’s peak 2000 years ago) has died either from nuclear annihilation or famine caused by the global warming that has left absolutely zero arable land to farm. Engineers (late game worker units) are always busy continuously building roads so that new armies can reach the front lines. Roads that are destroyed the very next turn when the enemy goes. So there isn’t any time to clear swamps or clean up the nuclear fallout.
Tom Kelley sent me a link to this article on a neat little device that I suspect violates weapons laws in most jurisdictions:
Last October, after hurting his knee playing hockey, Patrick Priebe was holed up in his apartment near Cologne, Germany, with nothing to do. He was sitting at his computer, staring at his keyboard, when the “Y” key caught his eye. Priebe didn’t see a letter. To him, it looked like a crossbow. Immediately he knew what his next project would be.
[. . .]
To fire, he pulls back the wire, hooks it around a brass block, and places an arrow in the groove. When he flicks the thumb trigger, the brass block drops, the wire pops forward, and the arrow flies.