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[GreatJustice]

There are many areas in which the government can simply step out and let private enterprise run things. It's been more cost effective in many cases in which this has already occured.

No, there really aren't.  The government got out of those areas long ago.  Actually look at the federal budget sometime man.  Tell me the specific things you think are so easy to cut and then look at what a tiny part of the budget they are.

And you are talking about a part of the budget that amounts to 520 billion dollars.  You can not cut 1 trillion from 520 billion.  It simply does not work.  Even if you cut every last cent and forced congress to hitchhike to washington where they would legislate in the dark that would leave 480 billion dollar gap.

Certainly. So far as things to cut, here are the "easy" ones:

(1) Military spending. The US military is a necessary thing, yes, but it doesn't need to be stationed across the world. A quick withdrawal from current active warzones (Afghanistan, etc) alone would allow for some very major yet simple cuts. Follow that up by selling off the bases across the world to local nations and ending the effective subsidies to western Europe and Japan, and you're well on the track to having a sustainable budget. I can kind of understand the need for such bases with the Soviet Union out causing mischief, but these days I don't see Russian tanks barreling across Checkpoint Charlie. A bit more trimming from aggressive expenditures (sending carrier fleets on worldwide tours and playing at gunboat diplomacy with China/Iran, etc) and military spending would be significantly lower. Keep in mind, military spending is something like 40% of the US budget, so this isn't a Romneyesque "efficiency cut" of a couple hundred million.

(2) Social Security. Now, this would be a long term thing, as an immediate removal would necessitate basically robbing the elderly of their investments. However, SS is frankly unsustainable in any meaningful sense in the long term, so it has to be seriously cut back regardless of whether or not you want to cut deficit spending. An opt out clause, and putting priority on "refunds" would allow for a somewhat safe end to it. It would, of course, be messy, especially considering how many irresponsible US presidents (from Reagan to Clinton) have robbed the fund to give off the illusion of a balanced budget, but there isn't (nor was there ever) any easy way out of it.

(3) Medicare and Medicaid. For basically the exact same reason as Social Security, except ending it will be even trickier due to there being more people effected. Unlike Social Security, Medicare and Medicaid never, ever had a period where they were a net benefit. They're solutions in search of problems, and have generally only served as a gigantic pits for money to get lost in. They're like black holes; the more money put into them, the less quality comes out.

There you go. With those cuts, even over a long period of time, you would be running a surplus within about a decade. It would hurt, but all of those cuts are absolutely necessary at some point in the future.

Mind, the vast majority of the American political class is completely and utterly spineless, so the odds of any of those cuts occurring are exceptionally low.

Also, for the record, I'd say that Romney is in no way better than Obama. He talks "free markets" and "deregulation", but were he elected, even with a friendly Senate, at best he'd cut a few taxes, make a big deal out of cutting from some insignificant program (see: the controversy regarding Planned Parenthood and NPR), and bomb some people like a good war hawk. He'd "repeal" Obamacare and probably replace it with something similar and call it "FREEDOMCARE". Likewise, a reelected Obama would continue to help out his banking buddies, continue to play world policeman while making token "withdrawals" (likely covered by replacing the withdrawn troops with mercenaries, as was done in Iraq), and maybe increase some taxes. To say there is any significant difference between the two is laughable.

If we restored the economy to full employment through treasury run quantitative easing, i.e. the platinum coin option (which would cost nothing but would piss off republicans), repealed the Bush tax cuts entirely and repealed the Bush effort to privitize medicare through medicare part D (which is more expensive) and finished the pull out from afganistan and Iraq, we wouldn't have a budget deficit.

If you took all of the assets of the richest Americans and put them towards reducing the deficit, it would barely make a dent. Tax policy, be it from tax cuts or tax increases, won't make a significant difference in the long run (especially when you consider that sufficient increases just result in billionaires headed for Singapore).

Quantitative easing would be a good way to get the economy running again, but then it would also have the unfortunate side effects of creating vast amounts of malinvestment, the end result of which would either be a deeper recession or heavy inflation (dependent on how "successful" it was and whether the banks decided to start lending out their reserves). In the long run, a recession is inevitable. However, whether the Federal Reserve intervenes significantly in the meantime will decide whether it is a short, deep, one with a quick and solid recovery or a giant mess that keeps getting worse.

Pulling out of Afghanistan and Iraq would, indeed, be a great way to reduce the deficit. However, while doing so, it doesn't make any sense to continue to pay for Japan and Germany's defense so that those countries can redirect more money to their welfare systems. The US doesn't presently have any military threats, and thus doesn't need to pay for a gigantic empire across the world.

For starters, regulate the financial industry much more strictly. The blame for our current economic mess, as well as that of Europe, can be placed almost entirely on a lack of effective regulators. And that's only if we're feeling generous; the financial industry at this point appears to be fundamentally broken and rotten to the core. We may even be better off regulating much of it out of existence. They siphon trillions from the economy while doing nothing but shuffling numbers. Then when it breaks, governments are forced to siphon even more money to them.

Regulation makes absolutely no difference to the largest of banks, not in the least because the difference between central banks, massive commercial banks, and governmental treasuries is incredibly blurred these days. People in the banks transfer to high level governmental positions for safe, cushy jobs, while people in the government transfer to banks to make obscene amounts of cash. Thus, both have an interest to keep things pleasant for each other; the bankers don't go against what the central banks want (eg. subsidized loans to the poor), and in turn the regulators and central bankers offer generally favourable terms to the banks. In the end, regulations only really hurt the smaller competitors in the given industry, the ones who aren't on the same scale and can't make friends with or buy off the regulators.

The proper way to deal with this problem is to

(A) Cut regulations, which rarely apply to aforementioned commercial banks anyway and
(B) Make it abundantly clear that if anyone screws up, they won't be tossed a lifeline, given a bailout, or given absurdly generous loans. They'll be left to collapse and more efficient companies will take their assets and carry on.

ZeroHedge put it better than I could :

Here's the deal Jamie: Zero Hedge, knowing full well we are quite mortal, and as like everyone else - very susceptible to temptation - realize we too 'have our price', would have no interest in finding out just what said "price" may be, by succumbing to bribery or any other form of corruption by you and/or your HFT peers and competitors. Nor do we have an interest in pretending to "regulate" you for several years, then submitting our resumes to you, tired of five figure government jobs, and expecting some quid pro quo in exchange for all those years when we saw the HFT 'lobby' engage in gross market manipulation, and demanding some form of equitable recompense, preferably in a far better paying job (for example moving from the NASD to Goldman Sachs... in a purely hypothetical scenario of course) but really anything with a lot of the zeros (that we enabled) at the end of it, would do.

We have no interest in that.

We realize that makes us different than the SEC. Because frankly, just like you, we also realize that the first entity to be purchased in any regulated venue, is none other than the regulator. Which in the absence of the SEC, we assume would be us.

We have no interest in that either.

But more importantly, we would not even dream of regulating you, or anyone else for that matter, because frankly, unlike the collapsing and insolvent status quo, we believe in the myth of a fair market, one where a room full of academics does not believe it is smarter than the collective rational whole of countless unitary market actors.

We believe in a market that regulates itself.

That means that the banks can go hog wild in loading up on CDOs, selling CDS, leveraging themselves 1000x times, and whatever else they feel like doing in pursuit of that ever more elusive ROE, but when they blow up, as they always inevitably do in a world in which they know that the politicians and regulators they have purchased have no alternative but to rescue them, they blow up. Period. Game over: not a penny in taxpayer money would ever be used to rescue them.

(http://www.zerohedge.com/news/no-itg-zero-hedge-would-prefer-not-regulate-you-either)

Short of maybe completely scrapping the military I don't think that is possible.  In any case the sudden mass unemployment caused by doing that is not likely to be helpful to the economy or the deficit, especially if you also canned social security.

Looking at short term unemployment on its own is a bit of a waste of time. When the economy is going through a recession, resources are reallocated from inefficient uses to more efficient uses. A lot of people are unemployed, but most of them have the skills, experience, etc to immediately get a job after in the recovery period, and will be a net benefit to the economy.

If you want to deal with short term unemployment, you could just create jobs paying $25 per hour for anyone to dig and fill ditches on Federal land. Nothing worthwhile is being created, but money is flowing in the economy and unemployment could very well reach nearly 0%. Or you could do things the way they do in Sweden and Japan and offer massive subsidies to companies that don't fire workers but pay them to sit around all day doing nothing (becoming "window sitters"). But such things don't even remotely improve the state of the economy, they just make the statistics look pretty.

[mainiac]

Repealing the Bush tax cuts would bring in about 330 billion dollars a year over the next decade.  Seeing as that's what I actually said, not appropriating all the wealth of the rich, I would like to know why you consider 330 billion dollars a year to barely put a dent in the deficit.  that's 1/3rd of the problem right there.  Get another 500 billion dollars from an economic recovery due to platinum coin type QU leading to another 400 billion in tax revenues and 100 billion less in emergency spending and get another 160 billion from withdrawing from Iraq and Afganistan.  That gives you... a balanced budget roughly speaking.

And sorry but social security is not unsustainable.  It would only take a tiny improvement in it's financing to make it on secure footing indefinitely.  If annual gdp growth over the next three decades is 2.75% instead of 2.5% then there is no social security shortfall.

Medicare is only unsustainable if costs continue to rise faster then economic growth.  But the more logical thing then repealing it and dumping those costs onto tax payers would be to slow the cost growth.  Savvy followers of Medicare finances know that this is exactly what has happened in the past two years as cost growth has come sharply down.  Dumping onto taxpayers would be giving up the cost controls that have been successful in the past two years and bankrupting our economy through exorbinant private insurance costs.  Theres a reason that no other country on earth thinks that making people buy health insurance on the private market is the way to go.

[alway]

(B) Make it abundantly clear that if anyone screws up, they won't be tossed a lifeline, given a bailout, or given absurdly generous loans. They'll be left to collapse and more efficient companies will take their assets and carry on.

Ahahahaha. That's a good one!
But seriously, the whole reason deregulation doesn't work is because that doesn't work. Aside from the MASSIVE collateral damage (avoiding which was the point of the bank bailouts if you recall), it doesn't even accomplish your goal of punishing those responsible. As we have seen time and time again of late, the only ones hurt by big collapses are the little people. The executives whose short term thinking doomed the company in the long term have been thrice replaced by the time their bets go south. The only people working at the same place for 20 years are their employees. The execs get their golden parachutes and head elsewhere, which is one of the reasons it MUST be nipped in the bud, rather than festering for decades.

[kaenneth]

(B) Make it abundantly clear that if anyone screws up, they won't be tossed a lifeline, given a bailout, or given absurdly generous loans. They'll be left to collapse and more efficient companies will take their assets and carry on.

Ahahahaha. That's a good one!
But seriously, the whole reason deregulation doesn't work is because that doesn't work. Aside from the MASSIVE collateral damage (avoiding which was the point of the bank bailouts if you recall), it doesn't even accomplish your goal of punishing those responsible. As we have seen time and time again of late, the only ones hurt by big collapses are the little people. The executives whose short term thinking doomed the company in the long term have been thrice replaced by the time their bets go south. The only people working at the same place for 20 years are their employees. The execs get their golden parachutes and head elsewhere, which is one of the reasons it MUST be nipped in the bud, rather than festering for decades.

If all those golden parachutes were taxed at 90% after the first million...

[kaijyuu]

If the solution was easy and obvious we would've done it.

[Flare]

There are many areas in which the government can simply step out and let private enterprise run things. It's been more cost effective in many cases in which this has already occured.

I admit that there are instances where private industry will do a better job, but this is entirely dependent on who is picking up the job not the fact that whomever is doing is a private enterprise. There are some things that government can do well and some that it can't, but many of these isn't due to whether or not they are part of the government. It largely depends on who is in charge and the policies in place. Claiming that private enterprise is the silver bullet to the government's inefficiency without elaborating exactly how it's going to be done and simply relying on the label that those taking over are profit driven isn't a good argument. A corporation in charge of the same things as the government can just as easily suffer from the same inefficiencies that you think the government commits.

For the most part, if the efficiency you're talking about is due to the waste of manpower or the mandatory keeping of bad employees in the system, all that needs to be done is to give the government more power in how it handles its human resources. I think everyone who has worked in a governmental agency agrees that these institutions would all be better off if the heads can fire people who can't or won't work more easily and lay off people when they're no longer needed for the foreseeable future.

[mainiac]

from what I've read from the B12 collective conciousness, America's economy is bad, no matter which way you look at it, and all the solutions are bad/have bad consequences.

Au contraire, we actually have a really good economy, it's just that our political system is doing the best it can to sabotage that.  Imagine how awesome our economy would be if we weren't wasting 8% of our national output on inefficiencies in the healthcare system compared to the rest of the world.

[GreatJustice]

(B) Make it abundantly clear that if anyone screws up, they won't be tossed a lifeline, given a bailout, or given absurdly generous loans. They'll be left to collapse and more efficient companies will take their assets and carry on.

Ahahahaha. That's a good one!
But seriously, the whole reason deregulation doesn't work is because that doesn't work. Aside from the MASSIVE collateral damage (avoiding which was the point of the bank bailouts if you recall), it doesn't even accomplish your goal of punishing those responsible. As we have seen time and time again of late, the only ones hurt by big collapses are the little people. The executives whose short term thinking doomed the company in the long term have been thrice replaced by the time their bets go south. The only people working at the same place for 20 years are their employees. The execs get their golden parachutes and head elsewhere, which is one of the reasons it MUST be nipped in the bud, rather than festering for decades.

Execs who run banks that go under would not have golden parachutes were it not for their buddies in the government handing them out.

Collateral damage will occur, but again that's a side effect of economic restructuring. If the economy has been pushed in the wrong direction, going back hurts but its ultimately necessary and will result in real growth later. The alternative is to let malinvestment sit around, let the crooks go free, and to keep delaying the inevitable until either you give up and the economy crashes far worse than had you done nothing, or you keep intervening and you're left saddled with worthless money (assuming you used the regular methods of monetary intervention at least).

Repealing the Bush tax cuts would bring in about 330 billion dollars a year over the next decade.  Seeing as that's what I actually said, not appropriating all the wealth of the rich, I would like to know why you consider 330 billion dollars a year to barely put a dent in the deficit.  that's 1/3rd of the problem right there

I'd like to see your sources on this one, but lets assume that 330 billion dollars are, in fact, added. Hoozah! Except total expenditures are around 3.5 trillion whereas total income for the US government INCLUDING that 330 billion is around 2.8. This is, of course, ignoring any economic problems that could arise in the process, which I might cover later if I get enough time.

Get another 500 billion dollars from an economic recovery due to platinum coin type QU leading to another 400 billion in tax revenues and 100 billion less in emergency spending

That a giant leap in logic, to assume that such an economic recovery would last at all, would produce such a massive increase in revenue, and would not simply result in Japan 2.0 or Post War Hungary 2.0. I could just as easily say "They should cut all taxes by 10% where possible, whereupon the incentive to spend would increase and create a trillion dollars in tax revenues!", but we both know that would be nonsense.

get another 160 billion from withdrawing from Iraq and Afganistan.  That gives you... a balanced budget roughly speaking.

This is the one thing I agree on, but frankly your proposal lacks the radicalism necessary in terms of military cuts, which I note you have carefully avoided. Proper military cuts would cut the deficit by more than all of your taxes AND minor military cuts combined.

And sorry but social security is not unsustainable.  It would only take a tiny improvement in it's financing to make it on secure footing indefinitely.  If annual gdp growth over the next three decades is 2.75% instead of 2.5% then there is no social security shortfall.

Oh yes it is. The number of people paying into it, in addition to the increase of people receiving it, is getting to be disproportionate. Like Medicare and Medicaid, it is a program that was once a fraction of the US GDP that is rapidly becoming a larger and larger share. There is no way to keep it going for the next twenty years unless you expect the younger generations to work like robots day in and day out to pay off the previous generation's SS.

Medicare is only unsustainable if costs continue to rise faster then economic growth.  But the more logical thing then repealing it and dumping those costs onto tax payers would be to slow the cost growth.  Savvy followers of Medicare finances know that this is exactly what has happened in the past two years as cost growth has come sharply down.  Dumping onto taxpayers would be giving up the cost controls that have been successful in the past two years and bankrupting our economy through exorbinant private insurance costs.  Theres a reason that no other country on earth thinks that making people buy health insurance on the private market is the way to go.

Look, if you want socialized healthcare for the US, go right ahead and advocate for it. I think it doesn't work, but I can see some logic to it. Medicare and Medicaid are gigantic tumours riding on the back of private health insurance systems and absolutely need to be removed at some point for the same reasons as SS.

Keep in mind, though, that the US has exactly three examples of "universalized healthcare" to show for: the Indian health service, military, and veterans service. I've heard nothing but bad things from all three, so the US government doesn't exactly have a stellar record in that regard.

[The Mechanical Man]

I admit that there are instances where private industry will do a better job, but this is entirely dependent on who is picking up the job not the fact that whomever is doing is a private enterprise. There are some things that government can do well and some that it can't, but many of these isn't due to whether or not they are part of the government. It largely depends on who is in charge and the policies in place. Claiming that private enterprise is the silver bullet to the government's inefficiency without elaborating exactly how it's going to be done and simply relying on the label that those taking over are profit driven isn't a good argument. A corporation in charge of the same things as the government can just as easily suffer from the same inefficiencies that you think the government commits.

For the most part, if the efficiency you're talking about is due to the waste of manpower or the mandatory keeping of bad employees in the system, all that needs to be done is to give the government more power in how it handles its human resources. I think everyone who has worked in a governmental agency agrees that these institutions would all be better off if the heads can fire people who can't or won't work more easily and lay off people when they're no longer needed for the foreseeable future.

The argument relies on the Darwinian principle of survival of the fittest, only applied to economics. There is a constant competition between businesses. Ultimately, the idea is that the business with the most costumers will get the most profits. In order to attract costumers and be the best business, that business may have to have higher quality products, lower prices, etc. This is to convince people to go to that business rather than another one, the so-called "invisible hand" that guides people to the better business. But the result is that things are improved for the consumer through this competition.

This then goes to the idea that when the government runs things, there is no competition and no drive for profit, and therefore no incentive to increase quality.

Of course, there are many more arguments for and against this idea which have been around for hundreds of years.

[alway]

Execs who run banks that go under would not have golden parachutes were it not for their buddies in the government handing them out.

Er, respectfully, wtf are you talking about?
http://en.wikipedia.org/wiki/Golden_parachute

If the economy has been pushed in the wrong direction, going back hurts but its ultimately necessary and will result in real growth later.

And now you are making a false dichotomy; it isn't "we let everything go to shit, then we either fix it or we don't." The whole point of regulation is to not let everything go to shit to begin with.

That a giant leap in logic, to assume that such an economic recovery would last at all, would produce such a massive increase in revenue, and would not simply result in Japan 2.0 or Post War Hungary 2.0. I could just as easily say "They should cut all taxes by 10% where possible, whereupon the incentive to spend would increase and create a trillion dollars in tax revenues!", but we both know that would be nonsense.

Two things here. First of all, 500 billion in QE is nothing. To demonstrate that point, let me point out to you that in the past 4 years, the fed has done a total of 2 TRILLION dollars of QE to buy up the morgage-backed securities. Inflation throughout this period of time was not only lower than than decade average, but was actually deflationary for a relatively extended period of time (most of '09).
http://en.wikipedia.org/wiki/Quantitative_easing#Amounts
Secondly, while it has helped avert disaster, 500 billion is also probably not enough for a full economic recovery at this point so long as the systemic problems in the financial sector aren't remedied.

As for social security, it is sustainable if and only if it is reformed to its original intent. That intent being to provide for those who live long enough above expected life expectancy as to make saving dry up (as living to 110 will eat through your savings if you expected and saved to live until 76). Essentially reduce it to something to prevent elderly destitution. The reason it is unsustainable is because it is given out at an age which most people are expected to live to, and as such everyone is able to get it for, on average, a full decade. Trying to provide enough funds during a 40-55 year working time to live comfortably for 10+ years is what is killing the system.

The argument relies on the Darwinian principle of survival of the fittest, only applied to economics. There is a constant competition between businesses. Ultimately, the idea is that the business with the most costumers will get the most profits. In order to attract costumers and be the best business, that business may have to have higher quality products, lower prices, etc. This is to convince people to go to that business rather than another one, the so-called "invisible hand" that guides people to the better business. But the result is that things are improved for the consumer through this competition.

Well, if we're going to misapply principles from completely unrelated fields: When a big enough entity dies, it collapses into a black hole from which nothing can escape.

I mean, seriously, even social darwinism is closer to being a correct use of darwinian principles. If you are dealing with economics, you should use, you know.... Theories of economics!

[Flare]

The argument relies on the Darwinian principle of survival of the fittest, only applied to economics. There is a constant competition between businesses. Ultimately, the idea is that the business with the most costumers will get the most profits. In order to attract costumers and be the best business, that business may have to have higher quality products, lower prices, etc. This is to convince people to go to that business rather than another one, the so-called "invisible hand" that guides people to the better business. But the result is that things are improved for the consumer through this competition.

Constant competition does not necessarily make these enterprises efficient. It's perfectly possible that while there may be an competition, that a great deal of inefficiency exist in the system. Rarely does competition from rival companies get to the point where a multitude of inefficiencies put a company down. There's a great deal of leeway in terms of how much large businesses can get away with being lazy.
But again we go back to the question of how much the many other domineering factors such as talent, policy, organization, and external circumstances affect the system you're looking at. Sometimes it might be the case that private industry should be allowed to take the reigns because the government doesn't have the right people or resources to do something, but in others if circumstances mean that government will do a better, more efficient job it should clearly be left to the government.

[The Mechanical Man]

The argument relies on the Darwinian principle of survival of the fittest, only applied to economics. There is a constant competition between businesses. Ultimately, the idea is that the business with the most costumers will get the most profits. In order to attract costumers and be the best business, that business may have to have higher quality products, lower prices, etc. This is to convince people to go to that business rather than another one, the so-called "invisible hand" that guides people to the better business. But the result is that things are improved for the consumer through this competition.

Well, if we're going to misapply principles from completely unrelated fields: When a big enough entity dies, it collapses into a black hole from which nothing can escape.

I mean, seriously, even social darwinism is closer to being a correct use of darwinian principles. If you are dealing with economics, you should use, you know.... Theories of economics!

Not only did I correctly apply the principle, this is part of an economic theory just under a different name. I'll explain it to you some more.

Survival of the fittest means that the species with the best adaptations for its environment will survive (surprising, isn't it!). Survival involves a competition for resources such as food. The so called Darwin Finches provide an example of this. Over time, several variations of a bird had developed on an island. They had different adaptations (different beak shapes/sizes, different kinds of feet, etc.) in order to obtain the greatest amount of food and eliminate competition for that food. In this case, the birds eliminated the competition by going after a different food source (some ate insects, some ate nuts and berries, etc.). This ensured their survival, as with this food they can live and reproduce. If a certain variety of finch was not able to compete with another, they would go extinct due to lack of food. The end result is that the most adaptable, most efficient species survives while the species that adapted too slowly or too poorly did not.

This applies to businesses. A business, like a species, is in constant competition for costumers (which bring profits) just as the birds are in a competition for food. The business that is able to attract the most costumers (or as in the bird example, the bird that is able to get the most food) is able to live on and make a profit. The unprofitable businesses, having made no money due to lack of customers, go out of business. Just as the bird that could not collect enough food would go extinct. The end result is the business that attracts the most customers survives, and in order to have attracted the most customers they must have had the lowest prices or highest quality goods. Or awesome advertizing.

I fail to see how this is a misapplication of the so-called "survival of the fittest" principle. Enlighten me as to why you think it is not. As for these theories of economics, what I am talking about here is one of the basic arguments of laissez-faire economic policies and classical liberalism. This stuff goes back to Adam Smith. Competition is good, is the totally basic idea.

The argument relies on the Darwinian principle of survival of the fittest, only applied to economics. There is a constant competition between businesses. Ultimately, the idea is that the business with the most costumers will get the most profits. In order to attract costumers and be the best business, that business may have to have higher quality products, lower prices, etc. This is to convince people to go to that business rather than another one, the so-called "invisible hand" that guides people to the better business. But the result is that things are improved for the consumer through this competition.

Constant competition does not necessarily make these enterprises efficient. It's perfectly possible that while there may be an competition, that a great deal of inefficiency exist in the system. Rarely does competition from rival companies get to the point where a multitude of inefficiencies put a company down. There's a great deal of leeway in terms of how much large businesses can get away with being lazy.

Large businesses and massive corporations, maybe, but not so much at a smaller scale. Competition doesn't automatically make enterprises efficient, but it encourages them to be efficient. After all, efficiency means more money, and what business owner wouldn't want more money?

One of the fundamental principles of this idea is that individuals are motivated by greed. Business owners want money. In order to get that money, they have to have a good business. They have to have something that I would want to buy. Otherwise I'd shop someplace else. The problems today (mostly with big business) is that enterprises are finding loopholes to exploit in order to gain quick and easy money. This undermines the whole idea, so naturally stopping this from happening would be very good for the system as a whole.

[Descan]

Of course, "efficiency" leads to this kind of thing, too. At least profit-manic efficiency.

[Flare]

Large businesses and massive corporations, maybe, but not so much at a smaller scale. Competition doesn't automatically make enterprises efficient, but it encourages them to be efficient. After all, efficiency means more money, and what business owner wouldn't want more money?

One of the fundamental principles of this idea is that individuals are motivated by greed. Business owners want money. In order to get that money, they have to have a good business. They have to have something that I would want to buy. Otherwise I'd shop someplace else. The problems today (mostly with big business) is that enterprises are finding loopholes to exploit in order to gain quick and easy money. This undermines the whole idea, so naturally stopping this from happening would be very good for the system as a whole.

I know what the concept of a free market is, and you're not addressing what I'm saying. As such I don't even know if you understand what I'm saying.

I'm trying to argue, that while capitalist principles might be at work, they may not always be enough to ensure that whatever the best enterprise a country can provide will in no uncertain terms perform more efficiently than the same service provided by the government. Some of these private enterprises will, but not all of them, and those that can and those that don't will always be in flux due to changing circumstances.

I'm not disagreeing on economic explanations, I am contending that their magnitude is not absolute. Simply giving an explanation about how private enterprises will be motivated isn't enough to support your claim that they will be efficient. There are simply a lot more factors that affect how well a group can provide a service. It's entirely possible for example, for a totally unmotivated group of slackers who, due to extremely fortunate circumstances, can provide a service far better than a group of skilled and motivated people. Circumstances like these won't happen very often, but there's a huge middle ground where motivation can vary and other elements play it up. Private industry will not always top up every single time.

[The Mechanical Man]

I have trouble finding an example of the government running something more effectively than private enterprise. When private enterprise does poorly, it's usually because there are regulations put in place that prevent them from increasing efficiency. An example of this is the private health care system (I just opened a big can of worms, didn't I? This is just a small example, I don't want this to become the focus of the discussion). People claim the government can operate it better than business. But getting rid of a few simple government regulations could drastically reduce costs by increasing competition. One such thing is the inability to purchase out-of-state health insurance. If I, as someone living in New York State, were allowed to purchase health insurance from a company in Pennsylvania, imagine how costs could be driven down; the health insurance companies in New York that had cornered the market would have tons of new businesses to compete against, and the best way to attract costumers is to lower prices or improve the quality of service. So this is an example of government rules preventing the best effects of free trade from occurring (because in this case the free trade is being inhibited).

It's very hard for me to make a solid argument when our current system does not usually support 100% free trade policies. What I'm getting from this debate is that I'm trying to argue for free trade - "let private enterprise do their thing" -, and you are arguing against it - "the government can do some things better than business". But I can come up with no perfect examples to support my claim, because 100% free trade hasn't existed in the US. As such, I have no practical examples, only "what if"s.

I agree that if the government can do something better than business, they should. The problem is I'm having trouble finding a good example of this (outside of things like the military- but who knows, maybe private enterprise could do that better too? I haven't examined the issue at any depth to tell). I support free trade only because it seems to have the best results. If you can prove to me that government run programs would have better results than private programs for the same thing, I would support the government.