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Comment by chiefalchemist | Hacker News Reader

> Those looking to buy a home but cannot afford the record high prices, are not faring well in this economy.

This is apples v oranges. Housing prices are the result a years, if not decades of mismanagement, bad decisions, sociopolitical forces, etc. On the other hand, "this economy" is a short term view of the present.

That aside The Fed's big problem is The Fed. It creates situations and then has to go to extremer extremes to dig itself out. The fact no one - most importantly, including Uncle Sam - can cut itself off from the addiction to debt certainly doesn't help.

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A caucophoney of voices from the fed have been calling on Congress to address numerous issues through the years. The issues are ignored (more regulation etc) and then it falls on the Fed to wield it's hammers (quantitave easing or interest rate uppers and downers) when shit goes sideways.

Exactly. Just look at Japan. If we have strong pro building laws, the house problem solves itself.

Japan also has virtually no immigration and a low birth rate, so the demand side of the equation keeps housing affordable, relatively speaking.

You should look at the immigration number from the other regions to the Tokyo metropolitan region instead. Tokyo is still growing.

People always forget about local migration, which moves the needle much more than international migration, usually.

Very true

The real problem is that spending wins votes, austerity does not.

That and of course every implementation of austerity seems to do long term damage to the economy of countries that apply it. I recall a few articles even saying that the maths that supported austerity was the result of a spreadsheet error, though whether that’s true I don’t know.

What we do know is that tax cuts for businesses and high earners has never demonstrated any gains for the majority of citizens but has resulted in increasing disparity and reduction in the rate at which people can move up the economic ladder.

It remains weird to me that there’s an entire cohort of people who look back with yearning to the 50s-70s where that tax rates were reasonable, but then aggressively complain about any attempt to move even slightly in the direction of restoring those tax rates.

Instead we get “we will fix the economy with austerity” in which we reduce the taxes for people and companies with no cash problems, but drastically increase the costs for everyone else. If need be we will also use the taxes paid by the group that isn’t getting tax cuts to bank roll the people getting tax cuts.

The real problem is that none of that spending actually goes to the people.

Virtually all of it goes “to the people.” Even the military budget is mostly payroll or operations (only 18% is procurement going to defense contractors). Social security is checks to individuals. Medicare is checks to healthcare providers.

> Even the military budget is mostly payroll or operations (only 18% is procurement going to defense contractors)

Not in a privatized defense environment where things are marked up 4000%. Yeah, you read that right.

A lot of those 4000% markup stories are apparently not real, but rather accounting artifacts; they're cases where, like, a wrench bills out at $20,000, but what's actually happening is that the procurement was for a whole stealth bomber, and the cost gets spread across all the line items pro rata.

> but rather accounting artifacts;

That is how money disappears. Like the $3 trillion that the Pentagon 'lost' and still 'cant find'.

The 18% is at those marked up prices.

Moreso than austerity, taxes need to be raised across the board, but that's even less popular

Especially taxes on upper middle class people. The biggest difference between US tax rates and say Germany or Sweden is not corporate taxes or taxes on capital gains, but income and consumption taxes on people above the median income.

We had an au pair from Germany, who had an entry level administrative job before coming to the US. Her total tax rate in Germany was 40%, about the same as what we had in Maryland with a top 1% household income. If you want universal healthcare and college, that’s what it costs.

She certainly didn't have a total tax rate of 40% with an entry level job. Maybe a marginal tax rate of 40% for a very small top percentage of her income.

You need an income of around 180k€/year to pay 40% total tax rate. That is very high end income here too, in the top 1% range.

Now, public health care (Germany does not have universal healthcare) and social security are not taxes, but if you include them in the total, you'd land at 40% somewhere around 40-50k€/year, which is still way out of reach for an entry level administrative job, which would be around half of that.

Both public health care and social security are near worthless here by the way, as both systems are near bankrupt and it shows. Mainly caused by millions of illegal immigrants receiving the same services for free, without ever paying a cent into the system.

> Now, public health care (Germany does not have universal healthcare) and social security are not taxes

If you don’t count these as taxes (you should, though), US comes out even stronger. At $200k/year, your effective income tax rate in Maryland is 23%. At $500k/year you’re still at just 33%.

For comparison, if you make in Maryland equivalent of 50k EUR/year, your effective tax rate, including social security and Medicare is just 21%. If you make $55k/year, your job typically offers some health insurance, so if you include employee side premiums for those, you will end up with something like 25%.

And that’s all before we even consider Germany’s 19% VAT vs MD’s 6% sales tax rate.

I agree with the US coming out stronger. One of the reasons why I'm working on moving myself and my business there.

I'm not so sure about counting them as taxes. Here are the edge cases for both in Germany:

1) You don't pay social security (~21%) if you are self-employed or a shareholder-director (with certain minimum percentage of shares) of a corporation. You can opt-in voluntarily, but most people don't like to light their money on fire, so almost nobody does that. There have been some attempts to turn this exemption over, but so far it stands. But the majority are employed with no way to avoid this, so they could count it as a tax.

2) Public health insurance is a percentage of your gross income (~20%), but it is actually mostly tax deductible. If you are over a certain income threshold (currently ~70k€/year), you can switch to private health insurance, which is a fixed rate instead of income percentage. This has pros (better service) and cons (hard to switch back to public health insurance after a certain time out of it, more expensive as you age, close family members not automatically included, preexisting conditions might be excluded from coverage).

What makes the whole thing even more complicated to compare, is that both public health insurance and social security are split between employee and employer on the payroll statement. So a gross salary of 60k€/year actually costs the employer 72k€/year. So for a better comparison, this total cost of employment and the total deductions should be compared. Most online calculators, politicians, discussions in the media, etc conveniently leave this out and therefore show much lower percentages, so your average employee isn't aware of this.

  60k gross salary
  72k total cost of employment
  12,7k social security
  12,2k public health insurance
  10,7k taxes

A total of 49,33% deductions. And yes, after that comes 19% VAT (reduced to 7% for some goods, e.g. food) and other consumption taxes (fuel, energy, tobacco, etc). Tax on fuel is especially crazy at a total percentage of 59% for gasoline and 50% for diesel.

I guess everybody needs to decide for themselves if living (or employing people) in a declining socialist country is worth that much.

UK and Australia has universal healthcare and doesn’t tax entry level people that highly.

the australian economy digs up dirt from the ground and sells it for a lot, it covers all our issues. theres a lot more that could be said, but it fundamentally comes down to that

The UK system is going broke, and Australia and Canada are weirdly efficient with their government spending and the US has no hope of matching them. I don’t think we could implement universal healthcare and education as efficiently as Italy. We are basically the richest Latin American country at this point.

> The UK system is going broke, and Australia and Canada are weirdly efficient with their government spending and the US has no hope of matching them. I don’t think we could implement universal healthcare and education as efficiently as Italy. We are basically the richest Latin American country at this point.

I wonder what explains their being "weirdly efficient"?

The most obvious difference is the parliamentary instead of a presidential system (also found in most of Latin America). Maybe what the US really needs is a Prime Minister? [0]

There's a lot more ways in which the Australian and Canadian systems differ from the US (and also from each other), but I think that's the most obvious one.

Although that doesn't explain the UK's "going broke", since it has a parliamentary system too. Possible explanation: the UK lacks federalism [1], the US has overly strong federalism, Australia and Canada are more in the "sweet spot" in the middle of the federalism spectrum

[0] doesn't require a monarchy, a Prime Minister can coexist with a figurehead President, as in Austria, Germany, Greece, Ireland, Israel, Malta, etc

[1] ok, it has devolution, which while technically not federalism, is kind of like a very weak form of it

Both Canada and Australia have strong federalism. About half of all expenditure is run through the state and local governments in the US. In Australia it’s similar, and in Canada it’s 75%.

I think the Presidential system has a lot to do with it. The people have a lot to do with it too. Large-scale immigration of Germans, then Irish and Italians, and now Hispanics has left a long tradition of ethnic machine politics in the U.S. that’s simply absent from Canadian and Australian politics. Even as say distinct Italian or Irish identity has diminished, our politics, especially on the left, is still centered around identity. In a typical national election, almost no political bandwidth is spent discussing efficiency of government services.

Look at Obama—the archetype of the modern Democrat. What was his job before politics? He wasn’t a labor leader or anything like that. He was a community organizer in Chicago’s ethnic-based political machine. He’s inspired a generation of people on the left—necessarily, the ones who would otherwise be most invested in government efficiency and quality of services—to become activists for their various identity groups. Do you think those folks are going to become efficient and confident administrators when they grow up?

Barack Obama was a community organizer working with the Catholic church for like a minute and a half in the mid-1980s.

You didn't live here at the time (also, you were like 2 years old), but you went to NWU and so you're still probably aware of what was happening on the south side in the '80s: the steel industry collapsed, gutting the south side economy. If anything, organizing in the 1980s was distinctively class-based, not race-based. It was a big story. The nuns taught it to us at St. Barnabas.

Meanwhile, Obama's "job" before "politics" was as a well-regarded full-time law teacher at the University of Chicago, a job he held 3x longer than his brief stint as an organizer 20 years prior.

2008 was a spell ago, but it seems my recollection is correct that Obama was the one who emphasized his experience as a community organizer: https://www.nytimes.com/2008/07/07/us/politics/07community.h... (“Mr. Obama’s three-year stretch as a grass-roots organizer has figured prominently, if not profoundly, in his own narrative of his life. Campaigning in Iowa, Mr. Obama called it ‘the best education I ever had, better than anything I got at Harvard Law School,’ an education that he said was ‘seared into my brain.’ He devoted about one-third of the 442 pages in his memoir, ‘Dreams From My Father,’ to chronicling that Chicago organizing period.”). Certainly, Obama was steeped in racial politics prior to his becoming president. And racial activism has flourished in the aftermath of his presidency—though it’s unclear whether he’s a cause of that or a symptom of it.

I’m not blaming Obama for these things—it’s not clear that politics in the US could be otherwise given the facts of history. But it’s certainly not conducive to good government.

I don't know what you're trying to say here. Obama's work history is knowable. We don't need to reconstruct it from the gists of his speeches. He was a community organizer in the mid-1980s, working with the Catholic church, when he was 22-24 years old, in the wake of the collapse of the steel industry in southeast Chicago and northwest Indiana --- a series of events that were not, as you would have had it in your previous comments, racialized. But his job immediately prior to his career in politics was adjacent to yours: he worked in the field of law.

My comment isn’t about Obama’s job history. It’s about what drives politics in the Democratic Party. When he ran for President and wrote his autobiography, community organizing was what he emphasized because that’s what plays to Democrats.

Respectfully, that's not what you said, and what you said was false.

> Both Canada and Australia have strong federalism. About half of all expenditure is run through the state and local governments in the US. In Australia it’s similar, and in Canada it’s 75%.

Just looking at who spends the money ignores some big differences. For example, unlike the US, Australia has a unified court and criminal justice system - the federal courts have jurisdiction to hear appeals even on purely state law questions; there are no federal prisons (federal prisoners serve their sentences in state prisons); outside of the military, almost all federal criminal trials happen in state courts (technically some federal courts have the jurisdiction to hold criminal trials, but that almost never happens-federal courts do try civil cases, but in criminal matters are effectively appellate only); state prosecutors can prosecute federal crimes and federal prosecutors can prosecute state crimes (common for federal prosecutors to add on lesser state charges and vice versa)

Australia has institutions like the National Cabinet (council of heads of federal, state and territory governments) which have no parallel in the US-“cooperative federalism”. Formal agreements between the federal and state governments plays a big role in Australia’s federalism, lacks much of an equivalent in the US-e.g. Australia’s food safety system is governed by an agreement between Australia’s federal, state and territory governments, and also the national government of New Zealand.

> The people have a lot to do with it too. Large-scale immigration of Germans, then Irish and Italians, and now Hispanics has left a long tradition of ethnic machine politics in the U.S. that’s simply absent from Canadian and Australian politics. Even as say distinct Italian or Irish identity has diminished, our politics, especially on the left, is still centered around identity

Last time you made an argument like this, I pointed out it ignores the importance of figures like Daniel Mannix (Irish Catholic Archbishop of Melbourne, 1917-1963) and B.A.Santamaria (Italian Catholic anti-communist activist; his height of political influence was in the 1950s) in Australia’s political history - between them those two men changed the outcome of more than one national election

And as to Canada, this argument of yours ignores the existence of Quebec, and also the (lesser) role that Anglophone-Francophone conflict has played in the history of some other provinces (e.g. New Brunswick, Ontario, Manitoba)

> What was his job before politics? He wasn’t a labor leader or anything like that. He was a community organizer in Chicago’s ethnic-based political machine.

Ethnic-based political organising exists in Australia too. For example, both major parties have done a lot of work on wooing the Chinese-Australian community, which includes interacting with that community’s social clubs, doing political interviews in Chinese language media, sometimes even running candidates from that background, etc

> Last time you made an argument like this, I pointed out it ignores the importance of figures like Daniel Mannix (Irish Catholic Archbishop of Melbourne, 1917-1963) and B.A.Santamaria (Italian Catholic anti-communist activist; his height of political influence was in the 1950s) in Australia’s political history - between them those two men changed the outcome of more than one national election

I’m not denying that immigrant groups were influential in Australia. But even today, 60% of Australia is English or “Australian” (which is mostly English). 80% are from the British Isles. By contrast, English are not even the plurality in most U.S. states: https://simple.wikipedia.org/wiki/Ethnic_groups_of_the_Unite.... Germans are the most common in the Midwest; Italians are the most common in New York, New Jersey, and Connecticut; Mexicans are the most common in the southwest; etc.

That has led to a completely different political mentality, where for more than a century, the center-left party has largely been organized around mobilizing its ethnic factions to “turn out” to vote. E.g. https://en.wikipedia.org/wiki/Tammany_Hall.

Of course you’re correct that Canada has a similar problem: the British were actually the ones who took over and supplanted the French founding population. They agreed to split up the country and give the French a great deal of latitude to do their own thing. That has mitigated what otherwise would have created tremendous conflict.

You’re certainly seeing more of that in Canada and Australia now given the mass immigration from Asia. But in the US this is been happening for 170 years or so. We’ll see if Canada and Australia are still well functioning and efficient after Chinese and Indian ethnic politics becomes a major force.

> But even today, 60% of Australia is English or “Australian” (which is mostly English). 80% are from the British Isles

From my perspective, you keep on wrongly downplaying the role that Irish Australians have played in Australian history. You acknowledge the significance of Irish Americans in American history, but ignore that Irish Australians are at least as significant in Australia's history, arguably even more so. By some estimates, 30% of Australians have Irish ancestry. [0] From the beginnings of British colonisation up until at least the end of WW2, the Irish have been Australia's single largest ethnic minority; in the US, I doubt they held that title for long (if ever), ending up being outnumbered by the Germans. The first substantial armed rebellion against British rule in Australia (there have not been many) was carried out by Irish convicts in 1804 near Sydney, many of whom were veterans of the 1798 United Irishmen Rebellion. [1] You seem to view Australia as a country which is mostly English, when the truth is that the majority of Australians have non-English ancestry (of course, English and non-English ancestry are not mutually exclusive categories).

> the center-left party has largely been organized around mobilizing its ethnic factions to “turn out” to vote

Irish-Australians have played a rather comparable role in the history of Australia's main center-left party (Labor) to what Irish-Americans have played in the Democratic Party. [2]

> You’re certainly seeing more of that in Canada and Australia now given the mass immigration from Asia. But in the US this is been happening for 170 years or so.

When you consider Irish immigration – in 1871, 25% of overseas-born Australians were born in Ireland [3] – it has been happening in Australia since the 19th century – which is significant given that modern Australian history begins in 1788.

[0] https://en.wikipedia.org/wiki/Irish_Australians

[1] https://en.wikipedia.org/wiki/Castle_Hill_convict_rebellion

[2] https://www.jstor.org/stable/23193797

[3] https://www.homeaffairs.gov.au/mca/files/2016-cis-ireland.PD...

Why exactly do we need higher taxes when the Federal government must still borrow to just pay the interest on its debt? There aren’t enough tax payers to cover the costs.

> universal healthcare

The US spends more, per captia on socialized medicine than Germany.

Why do we need to spend even more?

Because Americans don’t want a healthcare system that tells grandma they’re too old for expensive surgery.

We also don't want a healthcare system that focuses on prevention. A significant percentage of what the USA spends on healthcare could be mitigated with prevention. But there's no profit in prevention, and the general population doesn't want to sacrifice comfort and convenience. "What do you mean change my diet and lifestyle??"

> But there's no profit in prevention

Drugs such as semaglutide (Ozempic, Wegovy) and tirzepatide (Mounjaro, Zepbound) are making massive profits, and also have decent odds of preventing many obesity-induced (and also diabetes-induced) diseases

Okay, they also have side effects, and it is possible the disease burden caused by the side effects may (in the long-run) turn out to be worse than the disease burden they prevent. But, while that's a possibility, it is only a possibility, a possibility which could easily not come pass to

And even if some of those drugs turn out to have unacceptable side effects in the long-run, there are other drugs in that class in the pipeline which might avoid those side effects, in which case the profits will shift to those

> Okay, they also have side effects, and it is possible the disease burden caused by the side effects may (in the long-run) turn out to be worse than the disease burden they prevent. But, while that's a possibility, it is only a possibility, a possibility which could easily not come pass to

This is very unlikely to happen. This isn't like other obesity drugs that were first in class, glp-1 agonists have been around a long time and have a great safety record.

Obesity is 8% higher in the US than the UK.

The NHS costs half as much per captia as medicare, medicaid, etc and provides universal coverage.

That isn't it. It's simply theft.

If it was too expensive the time to say something isn't after a lifetime of cashing insurance premium checks.

>universal healthcare and college

I don't want these. Maybe if you penalize smokers, drinkers, and overeaters and get rid of degrees where you study socio-nonsense.

What you want or not is not related to what's best for a society. This radical individualism is, at best, short sighted.

You will benefit from a society that has healthcare and education, even if you individually would prefer not to be because you might not directly need it if you have your private money for your own healthcare and education. The rest of society might not and living in a society where people are decently treated is better for you in the long term.

From your own words:

> Would have done tons of things like this if I didn't have student loans hanging over my head.

With access to low cost/free education you'd be free from this, hence giving you more freedom. Healthcare is similar, without the lingering fear that it might bankrupt you in case you are not well covered you have more freedoms, you don't depend on an employer to have access to healthcare that won't destroy your life.

The warped view of freedom in America is baffling, you prefer to be "free to" than "free from". True liberation usually don't come only from being "free to"...

Believe it or not, I mostly agree! But we are not culturally proactive about our health. There are entire industries dedicated to making unhealthy people feel good about their obviously bad choices.If it were just 5% of the population, it would be no big deal, but it's not. 39.6% of americans are obese. If free healthcare came along with a cultural push that everyone who is able ought to get fit, I'd be excited about it. But as it stands I think it's simply not affordable, like our overzealous military spending.

As for degrees, college has a similar cultural issue. There are tons of degree programs that are frankly frivolous. I'm not even against humanities, but when I was in college I knew kids in $50k of debt making Picasso-esque garbage and writing conceptual poetry as the zenith of their studies. I still know them. They work in food service and are extremely unhappy and demoralised. In the same way we shouldn't be letting young people make these kinds of mistakes, we shouldn't subsidize them as a society. If we make STEM degrees free for anyone who can pass exams on the prerequisites, I'm all in. I'd like some support for humanities as well but it's incredibly hard to draw that line, especially now when people will sincerely argue that Jackson Pollock was as talented and important as Frederick Edwin Church.

But they are raised, via inflation. When the Fed prints money (so to speak) to finance the debt, and your savings are devalued, that is effectively a tax. But no one calls it that. No one sees it that way. So no one is upset about their taxes going up, tho effectively they have.

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