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Notes to myself, possibly of interest to others.
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Thursday, November 15, 2012

One of the many things which puts the lie to "conservatives"' arguments for "small government"

Dean Baker:  In an op-ed titled "Sweet Forgiveness," Mike Konczal raises many important points about recovery from the Great Recession, but, in assessing the length and duration of the downturn, he places undue weight on underwater homeowners...

I’m more convinced by Konczal’s analysis of tightening bankruptcy laws. The financial industry has effectively enlisted the government as a full partner in its debt collection efforts.

This is big government—really big government. Creditors can now use the power of the state to make up for their own ineptitude in assessing credit risk. As Konczal notes, the increased powers can even lead people to use Social Security benefits, which are generally exempt from seizure by creditors, to make payments.

Debt collection has the same negative effect on work incentives as taxes do. If someone has to pay ten cents of every dollar they earn to a creditor, it is as much a disincentive to work as a ten percentage point increase in the income tax rate. How can any honest supporter of small government approve of the increased role of the government in debt collection over the last two decades? Conservatives are very happy with big government; they just are smart enough not to admit it.

Konczal’s discussion of the government’s role as a debt collector is extremely valuable. And the analysis of the recession is an important corrective to the Reinhart-Rogoff twilight zone orthodoxy that a financial crisis somehow condemns us to a decade of stagnation.
Other things "conservatives"* like:
  • Agricultural Subsidies
  • Oil Subsidies
  • The Carry Trade for the Mitts of the world
  • Banking "law"
  • Roads, Bridges, Airports, etc
  • Many more. Exercise for the reader
The idea that "conservatives" are against government which benefits normal Americans, but actually for government which benefits the rich seems like a rant by an upset old-line communist.  However, the data, from the above article to Mitt Romney's claim that he is a brilliant business person who "built it on his own", show this to be true - uniformly, depressingly, and clearly.

* Why is "conservative" quoted?  Look up the word in the dictionary.  Compare and contrast.

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