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If the Government can't do disaster aid, what can it do - besides deliver goodies to the rich?  There can be no more important function for social solidarity/state support - bar perhaps defense of the nation, which is more or less the same thing.

In saying what he said, Romney is betraying his Randian roots. It doing what he is doing in NJ, Obama is expressing his solidarity and support of the Union, with Americans in distress everywhere, and particularly with his Democratic base.

And the quid pro quo is you get out there and vote if you support that Union!

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Nov 1st, 2012 at 05:28:24 AM EST
[ Parent ]
If the Government can't do disaster aid, what can it do - besides deliver goodies to the rich?
The most important consequence of running the state like a private firm is that the state should not be in the business of providing free or implicit guarantees of any kind, as these are large "contingent liabilities" threatening to bankrupt the state. The threat of bankruptcy is real, as the state must fund itself by borrowing from private lenders, unable as it is to create money to fund necessary expenses deriving from the exercisising of implicit guarantees. One alternative to bankruptcy is default, but this is considered unthinkable as defaulting on obligations to fellow EU member states is "uneuropean". In addition, countries with a large primary trade deficit may find it impossible even to default.

So, what kinds of implicit guarantees are Eurozone governments providing that they shouldn't be in the business of providing? I can think of half a dozen off the top of my head:

  • deposit insurance for banks
  • granting limited liability to businesses
  • disaster relief
  • access to health care
  • access to education
  • access to legal redress
  • public safety

All of these are implicit guarantees that every citizen in Europe expects to enjoy relatively free of charge. These are large contingent liabilities of the state. Any and all of them could not be undertaken by a private entity that didn't charge hefty fees up front and wasn't adequately capitalised in case a particularly large claim presented itself. Would you pay a savings deposit insurance premium to an inadequately capitalised insurance company? (not that "sophisticated investors" didn't do exactly that when they bought CDS "protection" over the past 10 years) Would you incur risks with a full-liability entity having less capital than your potential loss? Would you trust you can be rescued from a disaster by an entity without the capital and operating income to actually fund a rescue operation? How about health insurance from an entity without the resources to pay for the treatment? How about your right to file a complaint to an entity without the necessary money to operate a grievance handling system? How about contracting physical security or firefighting services from an entity without the operating income to actually deploy security or firefighters?

I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Thu Nov 1st, 2012 at 05:31:00 AM EST
[ Parent ]
Yes, my first reaction to listening to Romney's full quote, about deciding what the Federal government should do, was, "And disaster aid would be one of the first ones on the list".

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
by BruceMcF (agila61 at netscape dot net) on Thu Nov 1st, 2012 at 10:43:15 AM EST
[ Parent ]


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