Smashing Particles--Vanity or Good for Humanity?

[swede]

http://science.howstuffworks.com/large-hadron-collider.htm

It has no practical applications, only theoretical ones. Like when we were kids and we tried to wreck stuff in different, creative ways.

Perhaps the billions could be better spent helping abandoned souls like George Obama improve their lot in life. Lord knows his brother won't help. Personally, instead of blowing up my sister's Barbies with firecrackers I should have invested my energy in mowing my grandma's lawn. It's all about resources and how we use them.

Or will this heroic machine, harnessed into the ongoing quest for knowledge, inevitably result in something useful that will surely benefit mankind in some unforeseen way?

Or are you completely uninterested in physics crap?

[swede]

Half-brother. Sorry.

[texaspackerbacker]

Is this the same thing as the huge Particle Accelerator project between Dallas and Waco that fell through a few years ago?

They said about that, it had no DIRECT practical benefits, but that the theoretical stuff could lead to progress in a lot of other areas.

Economics is my field--not Physics. So let me say this about that:

According to Lord Keynes, the mega-billions spent for this--or other domestic projects--is money injected into the economy. That money translates to jobs, capital investment, income, demand, production, more jobs, more income, still more demand, still more production, income, etc. All of that income gets taxed and ultimately, more than pays the original cost of the project.

Does any of that trickle down to half-brother George? Hell yeah--if he comes to America and moves in with his half-brother. Not so much, though, over there in Kenya or wherever the hell his shack is.

[mraynrand]

According to Lord Keynes, the mega-billions spent for this--or other domestic projects--is money injected into the economy. That money translates to jobs, capital investment, income, demand, production, more jobs, more income, still more demand, still more production, income, etc. All of that income gets taxed and ultimately, more than pays the original cost of the project. .

So if they spent the money on a gigantic Cabrini Green, you're saying that would be equally good for the economy? Where does that money come from? What would it be spent on if not a particle accelerator/housing project?

[texaspackerbacker]

According to Lord Keynes, the mega-billions spent for this--or other domestic projects--is money injected into the economy. That money translates to jobs, capital investment, income, demand, production, more jobs, more income, still more demand, still more production, income, etc. All of that income gets taxed and ultimately, more than pays the original cost of the project. .

So if they spent the money on a gigantic Cabrini Green, you're saying that would be equally good for the economy? Where does that money come from? What would it be spent on if not a particle accelerator/housing project?

The obvious answer is that it comes from the Treasury--revenue from the Federal government. And that money, of course, comes from taxpayers. However, that is only the beginning of the answer.

If the total tax base--the income that is taxed--is X, and the tax rate is Y percent, then total tax revenue to the government is Y percent of X.

I hope no explanation is necessary of the fact that money injected becomes income for SOMEBODY. And those SOMEBODIES spend or invest that increased income. That spending or investment creates demand--which is met by more production--which in turn produces more jobs and more income. All of that additional income results in more tax money for the government--Y percent of (X + A + B)--A being the additional income produced by the original spending and B being the extra income produced by the Multiplier Effect--income caused by demand, production to meet that demand, etc. Keynesian economists generally estimate the B figure to be at least five times the A figure. Thus, the assertion that the spending--whether it is a Particle Accelerator or a housing project or whatever--comes close to paying for itself is reasonably accurate.

There are a lot of other reasons for opposing government social engineering, disrupting inner-city housing, etc. than the economic aspect--as the history of Cabrini Green and failed Great Society poverty programs proved.

[mraynrand]

But, Tex, what would happen if that money remained with the taxpayers? Wouldn't that be far better for the economy - in investment and spending - that having the government take it, even assuming a multiplier.

For example, Obama wants to spend 150 billion over 10 years on green technology. Jimma spent close to 20 billion on synfuel (otherwise known as Sin Fuel). We got jack squat out of synfuel. Where was the multiplier there and where will the multiplier be in 'green jobs?' Won't it have to be much less than the far more efficient free market - where bad ideas get exterminated far more rapidly than government boondoggles?

[HowardRoark]

According to Lord Keynes, the mega-billions spent for this--or other domestic projects--is money injected into the economy. That money translates to jobs, capital investment, income, demand, production, more jobs, more income, still more demand, still more production, income, etc. All of that income gets taxed and ultimately, more than pays the original cost of the project. .

So if they spent the money on a gigantic Cabrini Green, you're saying that would be equally good for the economy? Where does that money come from? What would it be spent on if not a particle accelerator/housing project?

The obvious answer is that it comes from the Treasury--revenue from the Federal government. And that money, of course, comes from taxpayers. However, that is only the beginning of the answer.

If the total tax base--the income that is taxed--is X, and the tax rate is Y percent, then total tax revenue to the government is Y percent of X.

I hope no explanation is necessary of the fact that money injected becomes income for SOMEBODY. And those SOMEBODIES spend or invest that increased income. That spending or investment creates demand--which is met by more production--which in turn produces more jobs and more income. All of that additional income results in more tax money for the government--Y percent of (X + A + B)--A being the additional income produced by the original spending and B being the extra income produced by the Multiplier Effect--income caused by demand, production to meet that demand, etc. Keynesian economists generally estimate the B figure to be at least five times the A figure. Thus, the assertion that the spending--whether it is a Particle Accelerator or a housing project or whatever--comes close to paying for itself is reasonably accurate.

There are a lot of other reasons for opposing government social engineering, disrupting inner-city housing, etc. than the economic aspect--as the history of Cabrini Green and failed Great Society poverty programs proved.

Can't I just do my own injecting without the middleman?

[mraynrand]

According to Lord Keynes, the mega-billions spent for this--or other domestic projects--is money injected into the economy. That money translates to jobs, capital investment, income, demand, production, more jobs, more income, still more demand, still more production, income, etc. All of that income gets taxed and ultimately, more than pays the original cost of the project. .

So if they spent the money on a gigantic Cabrini Green, you're saying that would be equally good for the economy? Where does that money come from? What would it be spent on if not a particle accelerator/housing project?

The obvious answer is that it comes from the Treasury--revenue from the Federal government. And that money, of course, comes from taxpayers. However, that is only the beginning of the answer.

If the total tax base--the income that is taxed--is X, and the tax rate is Y percent, then total tax revenue to the government is Y percent of X.

I hope no explanation is necessary of the fact that money injected becomes income for SOMEBODY. And those SOMEBODIES spend or invest that increased income. That spending or investment creates demand--which is met by more production--which in turn produces more jobs and more income. All of that additional income results in more tax money for the government--Y percent of (X + A + B)--A being the additional income produced by the original spending and B being the extra income produced by the Multiplier Effect--income caused by demand, production to meet that demand, etc. Keynesian economists generally estimate the B figure to be at least five times the A figure. Thus, the assertion that the spending--whether it is a Particle Accelerator or a housing project or whatever--comes close to paying for itself is reasonably accurate.

There are a lot of other reasons for opposing government social engineering, disrupting inner-city housing, etc. than the economic aspect--as the history of Cabrini Green and failed Great Society poverty programs proved.

Can't I just do my own injecting without the middleman?

Why don't you go do something useful to stimulate the economy and break some windows or something?

[HowardRoark]

Ha....you beat me to it...I was cutting and pasting....

"The Broken Window Fallacy"
_________
-
A young hoodlum, say, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furious, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side. It will make business for some glazier. As they begin to think of this they elaborate upon it. How much does a new plate glass window cost? Two hundred and fifty dollars? That will be quite a sun. After all, if windows were never broken, what would happen to the glass business? Then, of course, the thing is endless. The glazier will have $250 more to spend with other merchants, and these in turn will have $250 more to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.

Now let us take another look. The crowd is at least right in its first conclusion. This little act of vandalism will in the first instance mean more business for some glazier. The glazier will be no more unhappy to learn of the incident than an undertaker to learn of a death. But the shopkeeper will be out $250 that he was planning to spend for a new suit. Because he has had to replace the window, he will have to go without the suit (or some equivalent need or luxury). Instead of having a window and $250 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit. If we think of him as part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.

The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new “employment” has been added. The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier. They had forgotten the potential third party involved, the tailor. They forgot him precisely because he will not now enter the scene. They will see the new window in the next day or two. They will never see the extra suit, precisely because it will never be made. They see only what is immediately visible to the eye

[HowardRoark]

One more thing Tex......start reading Milton Friedman.

I haven't given up on you yet.

[texaspackerbacker]

But, Tex, what would happen if that money remained with the taxpayers? Wouldn't that be far better for the economy - in investment and spending - that having the government take it, even assuming a multiplier.

For example, Obama wants to spend 150 billion over 10 years on green technology. Jimma spent close to 20 billion on synfuel (otherwise known as Sin Fuel). We got jack squat out of synfuel. Where was the multiplier there and where will the multiplier be in 'green jobs?' Won't it have to be much less than the far more efficient free market - where bad ideas get exterminated far more rapidly than government boondoggles?

If taxes are CUT, yes, then you have MORE money in the hands of people who will spend or invest it, and the Multiplier applies to that also.

If you don't cut taxes, though, merely avoid the spending, then you have Y percent of X taxation/government revenue. With the A amount NOT spent, then the situation is revenue neutral from the government's point of view. What you DON'T HAVE, though, is 1. the benefit--however dubious it might be--from the project and 2. the massive secondary income--B in my model--from money spent, production, more income, more demand, more production, still more income, etc.

Therefore, even a complete boondoggle--no redeeming virtues at all to the project--is moderately beneficial, and if you spend it for something that DOES do some good--as this Particle Accelerator/Smasher might, then the benefit is even greater.

[HowardRoark]

But, Tex, what would happen if that money remained with the taxpayers? Wouldn't that be far better for the economy - in investment and spending - that having the government take it, even assuming a multiplier.

For example, Obama wants to spend 150 billion over 10 years on green technology. Jimma spent close to 20 billion on synfuel (otherwise known as Sin Fuel). We got jack squat out of synfuel. Where was the multiplier there and where will the multiplier be in 'green jobs?' Won't it have to be much less than the far more efficient free market - where bad ideas get exterminated far more rapidly than government boondoggles?

If taxes are CUT, yes, then you have MORE money in the hands of people who will spend or invest it, and the Multiplier applies to that also.

If you don't cut taxes, though, merely avoid the spending, then you have Y percent of X taxation/government revenue. With the A amount NOT spent, then the situation is revenue neutral from the government's point of view. What you DON'T HAVE, though, is 1. the benefit--however dubious it might be--from the project and 2. the massive secondary income--B in my model--from money spent, production, more income, more demand, more production, still more income, etc.

Therefore, even a complete boondoggle--no redeeming virtues at all to the project--is moderately beneficial, and if you spend it for something that DOES do some good--as this Particle Accelerator/Smasher might, then the benefit is even greater.

Why not just give the unspent money back? I can do my own boondoggle.

[texaspackerbacker]

But, Tex, what would happen if that money remained with the taxpayers? Wouldn't that be far better for the economy - in investment and spending - that having the government take it, even assuming a multiplier.

For example, Obama wants to spend 150 billion over 10 years on green technology. Jimma spent close to 20 billion on synfuel (otherwise known as Sin Fuel). We got jack squat out of synfuel. Where was the multiplier there and where will the multiplier be in 'green jobs?' Won't it have to be much less than the far more efficient free market - where bad ideas get exterminated far more rapidly than government boondoggles?

If taxes are CUT, yes, then you have MORE money in the hands of people who will spend or invest it, and the Multiplier applies to that also.

If you don't cut taxes, though, merely avoid the spending, then you have Y percent of X taxation/government revenue. With the A amount NOT spent, then the situation is revenue neutral from the government's point of view. What you DON'T HAVE, though, is 1. the benefit--however dubious it might be--from the project and 2. the massive secondary income--B in my model--from money spent, production, more income, more demand, more production, still more income, etc.

Therefore, even a complete boondoggle--no redeeming virtues at all to the project--is moderately beneficial, and if you spend it for something that DOES do some good--as this Particle Accelerator/Smasher might, then the benefit is even greater.

Why not just give the unspent money back? I can do my own boondoggle.

That would, in effect, be a tax cut--or if you prefer, a disbursal by the government. Either way, the Multiplier applies, and it's a good thing. Trouble is, how likely do you suppose it is that something like that would ever happen? All I am saying is the realistically most likely scenario--government money spent for whatever--is NOT an economically detrimental thing--and if it's socailly detrimental or goes against your grain of fairness, or whatever, fine. That's worthy of discussion. It's just NOT valid to oppose social boondoggles or whatever on economic grounds.

And Howard, I have read a lot of Friedman stuff, but Keynes makes more sense to me. Actually, a lot of this--the Supply Side aspect/tax cutting is pure Friedman. He just doesn't apply the same to spending.

[HowardRoark]

a disbursal by the government.

Interesting.

[ThunderDan]

Ha....you beat me to it...I was cutting and pasting....

"The Broken Window Fallacy"
_________
-
A young hoodlum, say, heaves a brick through the window of a baker’s shop. The shopkeeper runs out furious, but the boy is gone. A crowd gathers, and begins to stare with quiet satisfaction at the gaping hole in the window and the shattered glass over the bread and pies. After a while the crowd feels the need for philosophic reflection. And several of its members are almost certain to remind each other or the baker that, after all, the misfortune has its bright side. It will make business for some glazier. As they begin to think of this they elaborate upon it. How much does a new plate glass window cost? Two hundred and fifty dollars? That will be quite a sun. After all, if windows were never broken, what would happen to the glass business? Then, of course, the thing is endless. The glazier will have $250 more to spend with other merchants, and these in turn will have $250 more to spend with still other merchants, and so ad infinitum. The smashed window will go on providing money and employment in ever-widening circles. The logical conclusion from all this would be, if the crowd drew it, that the little hoodlum who threw the brick, far from being a public menace, was a public benefactor.

Now let us take another look. The crowd is at least right in its first conclusion. This little act of vandalism will in the first instance mean more business for some glazier. The glazier will be no more unhappy to learn of the incident than an undertaker to learn of a death. But the shopkeeper will be out $250 that he was planning to spend for a new suit. Because he has had to replace the window, he will have to go without the suit (or some equivalent need or luxury). Instead of having a window and $250 he now has merely a window. Or, as he was planning to buy the suit that very afternoon, instead of having both a window and a suit he must be content with the window and no suit. If we think of him as part of the community, the community has lost a new suit that might otherwise have come into being, and is just that much poorer.

The glazier’s gain of business, in short, is merely the tailor’s loss of business. No new “employment” has been added. The people in the crowd were thinking only of two parties to the transaction, the baker and the glazier. They had forgotten the potential third party involved, the tailor. They forgot him precisely because he will not now enter the scene. They will see the new window in the next day or two. They will never see the extra suit, precisely because it will never be made. They see only what is immediately visible to the eye

Of course now the glazier can buy a new suit which he couldn't before the window was broken. Seems like a zero sum game to me. The only difference is who is going to spend the $250 for additional goods.

Then you need start thinking about if the baker or the glazier is more likely to save the money or spend it. Is one in debt and they are just going to pay off a credit card company. Stories like this simplfy the problem kind of like Reagan's trickle down economics of the 80s and 90s. Nice talking points but the rich really got rich during that decade.

I am happy I was in the market back then.