Hacker News Reader

Comment by calrain | Hacker News Reader

Future America will understand that you don't treat government like a company.

The money government spends on salaries is money directly injected back into the economy, it could be seen as a form of social welfare.

View on HN

Yes, but they can get the same effect by buying military hardware--and that has the added benefit of making Raytheon management and shareholders richer. When you just directly pay an employee with government money, there's no way to do that!

The military industrial complex in the United States is a socialist jobs program (with the added benefit of making the management and shareholders of contractors richer).

"Future America" is sounding increasingly oxymoronic.

Much like Hatchback said, I don't see why it is a good thing to inject money into the economy versus not taking it in the first place. I'm not saying that these efforts are going to work to make the bureaucracy more efficient (I simply don't have the expertise to judge that), but I think any attempted solution is better than deliberately allowing inefficiency to fester as a form of social welfare. The federal bureaucracy has been a literal joke for longer than I've been alive because of how much it wastes resources. Something has to change, even if these current steps don't turn out to be the right ones.

By all means, we should be critical and say "this plan isn't going to work because xyz". That's an important part of the process. But at some point we do have to try something and see how it pans out, then try to adjust the plan based on the results.

That presumes that the intent of this effort – regardless of how it's spun – is to make government more efficient. It's hard to take spin like this at face value: voluntary departures may equally make programs less efficient since understaffed or more reliant on contractors, for example.

You know what else injects money back into the economy? Letting tax payers keep more of their tax dollars.

For low-wage employees who spend almost all of their income on goods and services, yes.

For highly compensated employees who save the majority of their money, no.

The solution is simple, crash the economy so there are more people spending their whole paycheck every month

Looks to be the plan.

Saved money are also injected back into the economy. They aren’t stored under the mattress. They are in banks, where they are lent out, spent and invested, creating jobs, buying goods and services.

You're only 1/3 right. Saved money isn't lent, nor spent (lending is just creating money). It's invested, 95% in the secondary market (probably more in the US). If the secondary market isn't correlated to actual production (and nowadays, it actually isn't, even in mining, prospecting and future are the main beneficiaries, which to me is crazy. One of the only exceptions is the energy sector), that money won't create real jobs.

What do you think those sellers on the secondary markets do with the money they get?

At the end of the investing chain it’s always jobs, products and services - or bank deposits.

Any money not physically hidden in a cash vault or under a mattress takes part in the economy.

Re-invest in crypto or other, already-existing stocks. The secondary market is so huge nowadays, and uncorrelated from dividends, mainly because growth (followed by regular buybacks), not dividends, is now the main way to pay investors, but not only. In fact, what Jacques Richard call "futuristic accounting" (his research is available in english [0]) is basically helping big companies to decorrelate real profits from dividends.

[0] https://www.researchgate.net/publication/265171038_The_dange...

> Re-invest in crypto or other, already-existing stocks.

Again, for a stock to be on the market, somebody has to do the economic activity to create & bring it there. Buying from that "someone" pumps the money back in the economy. Buying from another, previous, stocks owner just moves the situation to him.

Kind of like when you pay your retailer for the product on the shelf: there are certain delays but eventually the money has to reach the product builder, with each participant in the production & logistics chain keeping his share on the way.

This is simple, trivial logic and no amount of biased, ideological "research" can change it.

Except when you're in a bubble.

You're right, eventually an investor exit his position to buy newly issued shares or obligations, which in theory should be used to increase production.

What I'm saying is twofold: most of the money is invested in purely financial products, not production. Two examples: I'm not against futures, I think it's a good idea to stabilise farmers income. But when you have twice as much money in futures, twice as much investments in agritech, and the same agricultural output, can I say that money had no impact in production? Also,just look at the state of mining companies, or rather, where new money is invested. A lot is in new prospecting companies with 'AI' or 'blockchain' in their website. In the same time, new mines open less frequently, despite a huge increase in investment. Am I allowed to say that investment in this sector is decorrelated from actual production?

That's my first point. My second was that the new accounting 'technique' (futuristic accounting) used by some companies (PE, but probably others) is used to issue dividends uncorrelated from profit (thus uncorrelated from production).

Also I don't want to enter a boxing match, just confronting point of views, and I don't care that you didn't read about the specific of futuristic accounting, it's about accounting, I understand. But don't call ideological something you did not read next time.

The only point I am addressing here is the claim that invested money is not injected back in the economy.

Where exactly do you think invested money goes, if not in economy? Please be specific. Give concrete examples.

No boxing match, just trying to understand your point. I know nothing about mining sector and I have no clue what the connection with your “futuristic accounting” is.

But still less than if the federal employee was providing any ROI whatsoever on their salary. Why not instead talk about which federal departments (or agencies) provide an ROI, and how that can be measured in a nonpartisan way.

(In any case, US federal debt interest payments will be ~$952b in 2025, out of $7.5 trillion budget. That's >> more than the $271b on total salaries for all civilian employees (or the $4.7 trillion tax cuts which expire end 2025). So, intentionally crippling the federal govt still wouldn't touch either the debt or interest payments; except as a blunt instrument to kill govt programs and bypass Congress.)

Lowering government expenses will not reduce the tax burden of the majority of Americans.

Trumps original tax plan benefits the higher income earners at the expense of lower and middle income earners.

Source: https://taxfoundation.org/research/all/federal/donald-trump-...

My retirement account already has a big hole in it from Trump’s first round of tax hikes and tariffs.

I seriously doubt it’ll be any different this time around.

Reply on news.ycombinator.com