Is it true that the United States is becoming a socialist country? Those of us who teach economics and government can refer to a fairly good measure that enables us to answer the question. The use of the term by partisans, however, is often overly broad and inaccurate.
A few commentators use the term “socialist” as a synonym for any government activity. But it would be incorrect to describe the U.S. Coast Guard, the public library and Yosemite National Park as socialist enterprises.
When I have referred to socialism with my students, it has generally been to contrast the economic system with the greater efficiency of properly designed free markets. Economists are not terribly impressed with the performance of heavily socialist systems.
The word “socialism” describes a system in which a very large portion of economic activity is carried out by the government.
We can actually measure this and place each country on a continuum between private enterprise and public enterprise. You merely divide total government revenues by the gross domestic product. The result is a percentage that expresses the size of the government relative to the rest of the economy.
Among the industrial democracies, a figure of 30 percent government and 70 percent private spending would qualify as small government. In the old Soviet Union, the government probably absorbed 95 percent of the gross domestic product!
Each country chooses its own mix of public versus private enterprise. Each industrial democracy must determine for itself how to distribute various goods and services. Decisions about the public sphere are made at the ballot box. Choices about the private side of the system are made by casting dollar votes in the marketplace.
While the mix of public and private is unique to each country, some activities are always a matter of public decision-making. In every country, national defense is the government’s responsibility, as is management of the currency, police, courts, traffic regulations, the postal system and the licensing of professions.
Some decisions are always private, like the size and color of our houses and cars, and what we prefer for food, clothing and shelter.
There is, however, a large area of variation where countries and even communities differ over whether something will be provided by public or private enterprise. In some American communities, garbage collection, energy, road construction and even prisons are contracted privately.
In some countries, at various times, the coal industry, gas and electric energy, the telephone system, health care and even the ownership of auto and airline companies have been public monopolies.
Broadly speaking, a country that approaches 50 percent or more of economic activity in the hands of the government can be described as socialist. You could probably include Sweden (48 percent), Denmark (48.9 percent), France (44 percent) and Norway (43 percent) in this category.
The average size of tax revenues in Europe is 38 percent of GDP, including the United Kingdom (37 percent), Germany (35 percent), and Spain (36 percent). Canada is on the low side at 33 percent.
How do we compare? The most recent figures for the United States has government tax revenues absorbing 28 percent of the GDP. (This figure does not include borrowing.)
In 1975, government revenue was 25.6 percent of the GDP. When you subtract out our current high defense expenditures, it appears that the government hasn’t enlarged its share of GDP much over the past three decades.
Some of the talk about socialism is directed at the government’s strategy of taking a major position in the nation’s larger banks and auto companies. While this may appear like socialism, it is really just a stopgap measure to keep the economy from sliding deeper into a depression. Even the current health care proposals will likely expand private coverage.
There is no constituency in the United States that calls for the permanent nationalization of private industries. Some Americans briefly flirted with socialist ideas during the Great Depression, but there is no socialist tradition here.
The use of the word “socialism” in reference to government today is clearly exaggerated and inaccurate.
• Mickey McGuire, a retired high school social studies teacher, is among a select group of local residents with columns in the Tracy Press.
As far as government statistics go, I'll make two points:
1. the private sector plays just as fast and loose with the truth as our government does: anyone remember the tobacco companies on smoking and cancer? How about the nearly quarterly drug scandal s? PG&E gas line flaws being hidden for years? Goldman-Sachs and CDOs? There are daily examples this continues.
2. I believe government stats are as accurate as any large organization's are—the real game is hiding portions, twisting, or filtering them selectively to misinform or misdirect. For instance, Clinton change which of 5 unemployment stats the gov't keeps are called "unemployment" Our current rate of 8% would be more like 16% if he hadn't change it. Also, when housing costs became to high, they just removed it from inflation counting and many economist routinely ignore food and energy now too for the same reason.
The government has no monopoly on disinformation. IT's buyer beware from any source.
You must be joking right?
Gold is still on the USA "books" at $40 dollars an ounce, but the current market trend shows it moving onward and upward, at over $1000 an ounce.
Mickey, I think the "numbers" we read here and gold being fed to us by an anomymous organization who doesn't even reveal their meetings. Nobody even knows who the Fed is. They don't report to you and me. Right?
I'm sure you already knew that before you wrote the letter?
Personally, I'd like to know if you can get a degree in ecomonmics out of a bubble gum machine machine, these days? Or is it a cookie-cutter class taught by Democrats - for Democrats?
Jeeeeesh??!?!!??
It all depends on who's books, their trying to cook.
Peak oil predictions for worlds oil supplies have come and gone. The time is now for who can cookBook the longest. Those numbers are largely irrelavent. If you look at what companies are discounting. Up to 40%. Then look at federal impact on city budgets up to 20%. Then look at unployment numbers at over 10%. The "numbers are clearly fabricated. The author doesn't account for 15 to 40 of the US economy which has come and gone. Consider further that these "economists" won't even account for the "underemployed" whose "unemployment has run out and are now working two jobs. As they say in England, long live the king. Never trust a liberal to keep your books?
Read the book and then call me. As the doctors would say "TAKE TWO OF THESE AND CALL ME IN THE MORNING. You will be shocked.
Who found who? For What?
The Socialist or Communist agenda is starting to look like an American dream. Read the book "THE NAKED COMMUNIST" written by former FBI executive W. Cleon Skousen written in 1958. Read pages 259 to 262.
Some of the issues he writes about seem to be what's going on today, in our country. One interesting agenda is #15 on page 260. Capture one or both political parties in the USA.
The reading is stunning to say the least.
Mick,
If I count your "numbers" shouldn't that be seven years, plus one?
Keep going. Too funny.
Have a nice evening, to all !!!
This letter to the TP is less of a definition of what "socialism" is, or isn't.
It appears to have moreso defined precisely what a "know it all" is.
Maybe we should be talking about what a third world country looks like. Has the author been to what is called the "ghetto" in America to see what that is and isn't?
Socialism is when people have control and others don't. To say it another way, less than 25% of American's live in Ghetto's.
And growing.
Let's take off the rose colored glasses and stop pretending everything is peachy in Amerace, cuz we got numbers.
If you read down in the comment section you will see where the author admits that we don't even know the numbers.
I'll give you a hint. It has to do with the value of "mortgage backed securities".
That's why I brought it up.
Keep going Mickey! As an economist, I'd just wink to everyone else and say with a twinkle, you seem to be doing a fine job with those "numbers", Mick.
Keep going. Keep going....
If you read my last post in fairness you will notice that I didn't say that the government doesn't lie to us. The past eight years, more than any other, proves that the government does lie to us. My actual statement was in defense of the data collecting agencies I mentioned. Fortunately, there are plenty of people like you and me that are paying attention. Mick
Oil reserves data being fudged by US: Report
http://www.zeenews.com/news577659.html
The actual data may be *collected* by largely well-meaning and conscientious career federal employees.
The issue is how that data is *evaluated*--the methodology used to interpret the data. Which is largely impacted by politics and political appointees having authority over the data reporting.
And yes, the methdologies were changed in a corrupt fashion, for corrupt purposes.
If you want to to what extent the government understates inflation, take at look here:
http://www.shadowstats.com/article/consumer_price_index
Peter Schiff in his book Crash Proof also details the self-serving biases built into the government official metrixes.
btw, don't try to tell us that government wouldn't lie to us. When the FBI admitted it broke the law in making unauthorized wiretaps, who was prosecuted? Who went to jail? No one.
This whole discussion just serves to highlight the fundamental weakness of the federal system. The federal government (in toto, congress, supreme court, executive) alone is the judge and jury of the federal government.
Love your comments to Mickey, obviously you hit a nerve. I believe Ronald Reagan said this and in my opinion this fits a certain liberal to a T. The trouble with our liberal friends is not that they’re ignorant, it’s just that they know so much that isn’t so.
You wrote, "You really need to leave out the personal attacks too - its really rather juvenile, to say nothing of badly mannered, to speak to a 66 year old adult in that fashion."
You know, I was thinking the exact same thing. So why do you do it?
Yep, got ya beat by one year.
See, that's the trouble with you, you are the authoritarian who know everything and claims wisdom of age to back it up. But you never seem to think that there were others who sat in your classrooms that were actually older than you are.
Don't you see it's your elitist attitude that you address people with that is your biggest problem?
Try talking face to face with people and not down to them. You might get a little further that way.
As it was in your classroom many years ago, I discern it's useless to converse with you as your mind is made up and if people don't see it your way then they are wrong.
I made my arguments, as you suggested, and even offered two possible solutions. Still you won't respond but now whine that someone older than you shouldn't be treating a 66 year-old man this way.
Classic!
Even old Tom Benigno is on to your "game" and that is something to say the least now isn't it?
The problem you are now facing is there are some of us that are your age who know of your history pertaining to politics and are now calling you to task for it; now that there is nothing you can do to harm them academically, either them directly or indirectly with members of their families who were unfortunate enough to have to sit through your lectures in the classroom.
We're in a different world today Mickey and you no longer can rest on your academic prowess as you conducted your classroom activities. You no longer have the advantage of the final grade you could give to those who openly disagree with you.
So rather than deal in semantics, why don't you really address the issues on most American's minds rather than try to sell them something that isn't?
But it's all fine with me you know. I will offer you a small warning if you are smart enough to understand it and take it.
If things don't change for the better and very quickly for your party of favor, party heads are going to be falling come next election in 2010 as these "do nothing" Congressmen and Senators get voted out of office. Then you can be really proud because it's people like you who confuse the real issues concerning American's today with meaningless hyperbola over the technical meaning of words like "socialist."
Guess you must have written Bill Clinton's speech when it was addressing members of Congress with his statement, "Well it all depends on what the definition of is is." It seems it's become the norm in the politics of your party today.
You know, in the art of the slight of hand, you can usually pull off the same trick once or twice before the general public finally understand what's really going on. And when they do finally understand, it tends to get rather ugly.
Well, enough is enough. I can see you really are not interested in solving any problems but simply continue to support what has now become the status quo.
Welcome to change. What that change is no one seems to know because it seems they haven't really done much of anything except to bellyache, "It's all George Bush's fault."
Don't bother replying to me as it won't make any difference anyway. You have ignored others in this blog so like our current Congressman it seems you only answer those who are in favor of your thoughts.
So when you running for Congress? Sounds like you would be the Democratic party shoe in.
Course you would have to probably run against old Tom. Now that would be an interesting race don't you think? Why you both got plenty of years left in you so why not give it a shot?
Again, those are rhetorical questions and don't really want an answer.
In response to your statement, "according to you and your corrupt government statistics"
Its true that you have to take government statistics with a grain of salt. But its not because the agencies actively lie about results. For example, the Congressional Budget Office has to base predictions on how the law reads now, and not on how things are likely to be. A case in point is the Alternative Minimum Tax. The CBO's estimates of future budget deficits must assume that the AMT tax will be in effect in the future so that government revenues will be higher than they always turn out to be. Yet we all know that each congress for the past couple of decades has adjusted the AMT tax downward on a yearly basis. No president wants to fix the AMT problem permanently because it will make their future deficits look worse, so we are stuck with these yearly temporary fixes. Private economists know about this odd habit and are free to make adjustments to their own projections.
My main concern is not so much the quality of the data as it is with how it is used by politicians. My dad used to say, "figures don't lie, but liars figure". There are plenty of arguments among economists and statisticians about how numbers are added up and reported. But once you understand these limitations, I don't believe there is much of an effort to "cook the books" by our major reporting agencies - the Congressional Budget Office, the Commerce Department, the Bureau of Labor Statistics, the Fed, and the Bureau of the Census.
Its true that private businesses actively attempt to clean up their books around reporting time. Unfortunately, we have learned with Enron and Madoff, that you can't always trust the accuracy of "independent" auditors either.
There are several reasons to believe that while government agencies may get numbers wrong from time to time, its probably not purposeful. First, government data is a public record, not private. Second, the reports of the Congressional Budget Office and others are provided to congress, Republicans and Democrats alike. Any appearance of bias or inaccuracy would immediately bring the wrath of one party on the heads of the offending agency. Third, congress has oversight, including the right to hold hearings with subpoena powers. Fourth, millions of businesses (and the financial press) depend on these numbers. Many have substantial analytical resources of their own to spot flaws. Fifth, there are tens of thousands of economists, statisticians and financial experts that pour over government data, hoping to add to their reputations by discovering errors. Finally, the government bureaucrats that produce the data often change jobs and circulate through business and academia. I know its fun to wax self-righteous and indignant at the expense of government bureaucrats but the chances of distorting data and getting away with it long term are actually pretty slim.
You don't need to believe that government bureaucrats are angels. You just need to believe that they fear scandal, embarassment, and the loss of their jobs.
In response to your statement, "according to you and your corrupt government statistics"
Its true that you have to take government statistics with a grain of salt. But its not because the agencies actively lie about results. For example, the Congressional Budget Office has to base predictions on how the law reads now, and not on how things are likely to be. A case in point is the Alternative Minimum Tax. The CBO's estimates of future budget deficits must assume that the AMT tax will be in effect in the future so that government revenues will be higher than they always turn out to be. Yet we all know that each congress for the past couple of decades has adjusted the AMT tax downward on a yearly basis. No president wants to fix the AMT problem permanently because it will make their future deficits look worse, so we are stuck with these yearly temporary fixes. Private economists know about this odd habit and are free to make adjustments to their own projections.
My main concern is not so much the quality of the data as it is with how it is used by politicians. My dad used to say, "figures don't lie, but liars figure". There are plenty of arguments among economists and statisticians about how numbers are added up and reported. But once you understand these limitations, I don't believe there is much of an effort to "cook the books" by our major reporting agencies - the Congressional Budget Office, the Commerce Department, the Bureau of Labor Statistics, the Fed, and the Bureau of the Census.
Its true that private businesses actively attempt to clean up their books around reporting time. Unfortunately, we have learned with Enron and Madoff, that you can't always trust the accuracy of "independent" auditors either.
There are several reasons to believe that while government agencies may get numbers wrong from time to time, its probably not purposeful. First, government data is a public record, not private. Second, the reports of the Congressional Budget Office and others are provided to congress, Republicans and Democrats alike. Any appearance of bias or inaccuracy would immediately bring the wrath of one party on the heads of the offending agency. Third, congress has oversight, including the right to hold hearings with subpoena powers. Fourth, millions of businesses (and the financial press) depend on these numbers. Many have substantial analytical resources of their own to spot flaws. Fifth, there are tens of thousands of economists, statisticians and financial experts that pour over government data, hoping to add to their reputations by discovering errors. Finally, the government bureaucrats that produce the data often change jobs and circulate through business and academia. I know its fun to wax self-righteous and indignant at the expense of government bureaucrats but the chances of distorting data and getting away with it long term are actually pretty slim.
You don't need to believe that government bureaucrats are angels. You just need to believe that they fear scandal, embarassment, and the loss of their jobs.
If I had to guess I'd say you can't see the handwritin on the wall?