Where do you plant your feet?

I don’t agree with Paul Krugman on the need for a tighter safety net, but I also considr that Tyler Cowen’s idea of a budget surplus paid to the Trade Winners holds even less majesty for myself. I find more than a little difficulty with a Concept which would provide less protection for Labor, at greater taxation of Labor, just to pay Businesses who are making Money off Trade. Somehow Economics has lost the elemental View that Business Success should entail Business paying for itself through Profits. I believe that a far more effective Instrument would be a straight taxation formula for both Business and Labor, where only actual, real Production losses are excused from taxation. I sometimes think that there are more Tax nullifications in this Country, than there are People in this Country. Tax Reform must be the basic Corrective in any planned Alternative to Our current ad hoc compilation of economic performance retardants.

Mark Perry comes up with another reason why I worry about the current state of economics. I believe there is a greater coincidence in the Readings of the Study he cites which account for the Results; demographic movement definitely affects Business rotation, and People follow Job opportunities, but many other factors often impinge on demographic movements–the greatest being Lifestyle choice. This is only one side of the Question, though, as I ask myself what is the Result if the Study effectively pans out. The basis model states that a 1% reduction in State taxation leads to a 0.23% increase in Population. Proponents of the Study consider this Population growth to be an undefined Good, with no residual mathematical evaluation of the effects of that Growth. How much will Population Growth of that magnitude increase the social welfare Costs of the State? What is the loss of Tax revenues brought on by the 1% reduction in State taxation? What is the total Cost of Utilities provision and capitalization increase due to the Population Growth of 0.23%? Economics can take nothing for granted, unless We are willing to accept acute Shortages of Living Necessities down the Road.

Here is an sensible evaluation, but is it the correct one? The Krugman thesis may be better expressed as "If all elements of the Production Cost Schedule are identical except for Labor Wages, has the Pareto optimal for Trade been passed?" Of course, I am putting words into Paul Krugman’s mouth, and he can speak for himself; and may be a little resentful of my own rattles. Can there be a Comparative Advantage, when such advantage is based solely on Wages? The Answer is obviously Yes, but only with an introduction of monopoly pricing. Can the Reader make the Jump on that one? The Monopoly happens to be Capital formation, and Economic Profits are demanded above Normal Business Profits; Countries have to accept low Wages and high Product prices in order to obtain Jobs. Now the Economists can start yelling at me. lgl