Argentina defaults for second time

[Greylor]

But I am opposed to a progressive income tax
Happy to debate the merits


I think the Austrian's adopted scientific method many years ago - otherwise how would Kelsen have function - as to ASS I don't regard it as economics and certainly not as scientific: of course there is a philosophy of science discussion to be had and many problems many assertions as to scientific method that creeps in; falsifiability is a cornerstone of any science but the creation of a hypothesis is seldom a "sciency" exercise in the sense you are inferring.

I disagree.

Many men have had to pay good money for high quality ASS (Snoop Dogg et al. - 1997).

 

[w1z4rd]

I think the Austrian's adopted scientific method many years ago - otherwise how would Kelsen have function -

Nope

General criticisms[edit]
Mainstream economists have argued that Austrians are often averse to the use of mathematics and statistics in economics.[84]

Economist Paul Krugman has stated that because Austrians do not use "explicit models" they are unaware of holes in their own thinking.[86] In February 2013, Krugman further criticized Austrian School economists on their failure to revise their theory of inflation in light of their incorrect prophecies of government-induced inflation following the 2008 financial crisis.[87]

Methodology[edit]
Critics generally argue that Austrian economics lacks scientific rigor and rejects scientific methods and the use of empirical data in modelling economic behavior.[10][84][92] Some economists describe Austrian methodology as being a priori or non-empirical.[10][20][84][93]

http://en.wikipedia.org/wiki/Austrian_School#General_criticisms

as to ASS I don't regard it as economics and certainly not as scientific: of course there is a philosophy of science discussion to be had and many problems many assertions as to scientific method that creeps in; falsifiability is a cornerstone of any science but the creation of a hypothesis is seldom a "sciency" exercise in the sense you are inferring.

I was referring to scientific theory, not hypothesis. For something to be a scientific theory it has to be testable, repeatable and empirical.

 

[Paul Hjul]

I was talking about Austrians as having adopted scientific method - with Kelsen as an example


As for the Austrians more generally there is a discussion to be had on differences in philosophical underpinnings across cultural communities and whether "science" and "wissenschaft" perfectly translate. Are any social sciences outside of economics actually science? Mises work on individual motivation (micro-micro economics if you will) is pretty in line with motivation theory etc ... of many years later that is held as scientific. You have a similar calamity when it comes to Richard Posner - the Austrians of today are deeply enraged by Posner's rejection of their hogwash on scientific grounds but his general game theory propositions are deeply Mises influenced. A person doesn't need to refer to Mises any more, we have Arrow and social choice theory.
There is a wonderful piece in Cry the Beloved Country about being just on what we knew then but it no longer being the case. Based on what was known in the 1930s and the limited capacity to apply mathematical modelling in economics huge swabs of discourse that today would be econometrics were simply nonsense and we still have the crisis of fallacies about indicators pervading.

 

[w1z4rd]

I was talking about Austrians as having adopted scientific method - with Kelsen as an example


As for the Austrians more generally there is a discussion to be had on differences in philosophical underpinnings across cultural communities and whether "science" and "wissenschaft" perfectly translate. Are any social sciences outside of economics actually science? Mises work on individual motivation (micro-micro economics if you will) is pretty in line with motivation theory etc ... of many years later that is held as scientific. You have a similar calamity when it comes to Richard Posner - the Austrians of today are deeply enraged by Posner's rejection of their hogwash on scientific grounds but his general game theory propositions are deeply Mises influenced. A person doesn't need to refer to Mises any more, we have Arrow and social choice theory.
There is a wonderful piece in Cry the Beloved Country about being just on what we knew then but it no longer being the case. Based on what was known in the 1930s and the limited capacity to apply mathematical modelling in economics huge swabs of discourse that today would be econometrics were simply nonsense and we still have the crisis of fallacies about indicators pervading.

I have as yet to meet an adherent of the austrian school of economics that did not extensively quote Mises. And no, while certain economists might have accepted the scientific method, by in large, those of the austrian school of economics reject it in favor of praxeology.

PS, when I refer to people from the austrian school of economics I am not referring to people from Austria.

 

[Paul Hjul]

I have as yet to meet an adherent of the austrian school of economics that did not extensively quote Mises. And no, while certain economists might have accepted the scientific method, by in large, those of the austrian school of economics reject it in favor of praxeology.

I am yet to meet somebody who claims to be an adherent to the Austrian school of economic thought who isn't either (a) a troll; (b) a moron; (c) not really an adherent to the Austrian school but thinks the name is cool and a convenient way to submerge economic theory into their political arguments and beliefs. However that is a separate issue as to whether the Austrian school is dead in the water (or "debunked") or whether it offers significantly better insights into behavior than consumerist approaches - it also doesn't detract from the school's profound ability to remain the dominant heterodox school.

PS, when I refer to people from the austrian school of economics I am not referring to people from Austria.

I know hence the in the original comment

 

[w1z4rd]

I am yet to meet somebody who claims to be an adherent to the Austrian school of economic thought who isn't either (a) a troll; (b) a moron; (c) not really an adherent to the Austrian school but thinks the name is cool and a convenient way to submerge economic theory into their political arguments and beliefs. However that is a separate issue as to whether the Austrian school is dead in the water (or "debunked") or whether it offers significantly better insights into behavior than consumerist approaches - it also doesn't detract from the school's profound ability to remain the dominant heterodox school.

Well B certainly fitted Wild_Cat, but I dont think he was stupid. He was smart, but not firing on all cylinders. He was the person who actually created my original hostility to libertarian beliefs. His complete rejection of empirical evidence set off my bull**** alarm and it was that, that actually got me to do economics 101 and economics 102 at uni.

Austrian-school economists are to mainstream economists what creationists are to biologists.

I know hence the in the original comment

Was confused Didnt realize that was humor.

 

[Paul Hjul]

Austrian-school economists are to mainstream economists what creationists are to biologists.

Pretty much the case but unlike the creationist situation it doesn't need to be like that - which actually makes it more rather than less frustrating

 

[Nefertiti]

But I am opposed to a progressive income tax

what do you see wrong with a progressive income tax? At least I know what that is

 

[Paul Hjul]

what do you see wrong with a progressive income tax? At least I know what that is

firstly it is premised on a coercive theory of tax (as opposed to a consent or assent theory);

secondly it was largely introduced to preserve social class structures of the time - there is something deeply ironic about income tax debates "socialists" believe that by increasing the yield on a progressive income tax you can reduce inequality, the evidence hasn't really supported this - partly because other regressive taxes each up the progressive effect, but mostly because of opportunities for evasion and special interest lobbying;

thirdly it has an incredibly adverse consequences on motivation and incentive - particularly if there is a "super tax" premise introduced, as opposed to graded progressive taxation;

fourthly the alternative case for a flat income tax with basic guaranteed income (such as advanced by Milton Friedman) is more effective at reducing the actual problem of poverty - which is a lack of economic agency;

fifthly it inherently discourages fiscal balancing and effectively compels rejecting the "treasury view" if applied as anything more than an emergency stop gap mechanism, more than anything else income tax drives the unnatural growth of government;

sixthly it lends itself to creating a public discourse of a war on poverty which soon becomes a war on poor people - the overarching thinking of progressive income tax is to manipulate the worse traits of humanity rather than the better;

seventh, once progressive income tax systems start to affect innovation and growth (see thirdly) the natural utilitarian response is to create special exceptions and regulatory capture and crony capitalism is encouraged - in essence progressive income tax is a great way to get back to mercantalism

eighth, whilst the user pay principle ought to be qualified in order to accommodate fortuity and positive externalities, a progressive income tax wholly undermines a user pay premise in the market of those goods and services where taxation becomes a feature. This distorts those markets with persistent negative consequences

 

[Greylor]

Well B certainly fitted Wild_Cat, but I dont think he was stupid. He was smart, but not firing on all cylinders. He was the person who actually created my original hostility to libertarian beliefs. His complete rejection of empirical evidence set off my bull**** alarm and it was that, that actually got me to do economics 101 and economics 102 at uni.
Austrian-school economists are to mainstream economists what creationists are to biologists.



Was confused Didnt realize that was humor.

MyBB...now with people so stupid it motivates you to further your own studies to compensate!

 

[Nefertiti]

firstly it is premised on a coercive theory of tax (as opposed to a consent or assent theory);

secondly it was largely introduced to preserve social class structures of the time - there is something deeply ironic about income tax debates "socialists" believe that by increasing the yield on a progressive income tax you can reduce inequality, the evidence hasn't really supported this - partly because other regressive taxes each up the progressive effect, but mostly because of opportunities for evasion and special interest lobbying;

thirdly it has an incredibly adverse consequences on motivation and incentive - particularly if there is a "super tax" premise introduced, as opposed to graded progressive taxation;

fourthly the alternative case for a flat income tax with basic guaranteed income (such as advanced by Milton Friedman) is more effective at reducing the actual problem of poverty - which is a lack of economic agency;

fifthly it inherently discourages fiscal balancing and effectively compels rejecting the "treasury view" if applied as anything more than an emergency stop gap mechanism, more than anything else income tax drives the unnatural growth of government;

sixthly it lends itself to creating a public discourse of a war on poverty which soon becomes a war on poor people - the overarching thinking of progressive income tax is to manipulate the worse traits of humanity rather than the better;

seventh, once progressive income tax systems start to affect innovation and growth (see thirdly) the natural utilitarian response is to create special exceptions and regulatory capture and crony capitalism is encouraged - in essence progressive income tax is a great way to get back to mercantalism

eighth, whilst the user pay principle ought to be qualified in order to accommodate fortuity and positive externalities, a progressive income tax wholly undermines a user pay premise in the market of those goods and services where taxation becomes a feature. This distorts those markets with persistent negative consequences

Thank you for this, I'll need to do a bit of study before I do a response. I have a knee jerk reaction to some of the statements but dont know why

MyBB...now with people so stupid it motivates you to further your own studies to compensate!

thats right!

 

[Paul Hjul]

nothing wrong with knee jerk reactions as long as they are acknowledged as such ...

 

[Paul Hjul]

I don't think Argentina's real economy ever get into the top 10 in terms of size - and part of the problem is the a mismatch within the economy
but more to the point more than corruption etc ... it has been the consequence of a toxic mix of induced "supply side" economics (I always am torn between a lol and a gut wrenching cringe when "free market 'Mises proponents'" advocate shock treatment type interventions - there is a particularly toxic streak in US discourse that produces banana Republics as a natural consequence) and neo-Keynesian fiscal policies.

Okay let me see if I can be a little more explicit without being totally verbose:

Argentina has a fairly interesting economic history and while it certainly is true that Argentina came out WWII as a large economy (part of the reason the Nazis where fleeing to Argentina) I don't believe that if we take a comprehensive snapshot of the economies of different nations that Argentina has ever quite been in the top 10 (the number wiki gives) because invariably how you define and measure economic activity comes into play and the propensity to make these determinations on the formal economy should not be overlooked. (I used the term " real economy" is a rather iffy loose way, but regardless of this sort of flimsy definition ground the general sentiment can hold - or be falsified with evidence - that to make a solid statement about the size of the Argentinian economy as a whole vs say the Australian economy as a whole in 1909 or 1942 is quite difficult and getting to a point of comparing apples with apples is not particularly likely). However what is not in dispute by any serious quarter is that between independence (1810) and the coming to power of Peron (circa 1946) the Argentinian economy continued to grow very well on a mixed base of agriculture, industrialization and a finance industry to match. We've then got a series of fluctuation that run until 1989 when successive rounds of Neo-liberal "shock" treatment economics where imposed. In some respects the measures of the 90s put the economy into gear BUT as a few economists predicted in 1998 Argentina became one of the countries caught up in the collapse of LTCM [and in my view a liquidity and credit/faith problem emerged for Argentina] and a general rejection of the shock therapy economic policies happened so you saw the IMF advancing debt on what is really neo-Keynesian thinking.

When wanting to posit 19th and early 20th century Argentina as a model for industrious capitalism and free markets people are inclined to forget about the Baring crisis (who survived the Argentinian debt crisis but were taken out a century later by an earthquake the unveiled horrendous malfeasance and fraud), there is also a propensity to ignore that the gradual decline occurred after the depression and that steps of intervention in the economy - especially compelled "liberalization" have had quite the opposite effect.

Now the interesting thing about 19th and early 20th century Argentina is that it was outside the scope of being a banana republic and was largely under the influence of British capital and capital institutions (so even non-British capital - largely from America) adhered to British institutional paradigms BUT only to a point - or only in so far as London banking was concerned. I believe that unlike British cabinet theory which were following the treasury view the merchant banks had approaches that would later come to be known as Keynesian due to Keynes writing - but Keynes theories were based in part on his experiences at the India Office and his knowledge of the merchant banks. If we view the economic history (broadly and there are exceptions and different industry time frames) we see a pendulum in Argentina and as globalization acts to make the influence time shorter the banana republic producing mentality produced by the myth of American exceptionalism becomes and even greater feature.

 

[Techne]

The last Austrian (psuedo)economist we had on this forum was Wild_Cat, not sure where he is these days. Guys like Nico and Paul are more to the left of the adherents of the Austrian school of economics (Im sure Mises would see Paul as a socialist ) . As far as I know, Paul and Nico dont reject empirical evidence, mathematical models or the scientific method so their economics is more mainstream If techne understood as much about economics as he did biology then I am pretty sure he would be in favor of the Austrian school of economics.

What? Stop talking about me, you haven't got a clue.

 

[Mortymoose]

Does this mean if I wanted to buy property in Patagonia it would now become cheaper for me to do so, or because we are an emerging economy, we will also be dragged down?

 

[Nicodeamus]

Is there a book for dummies that explains all this? So I can get the basics

Basically there are different schools of economics, unlike conventional science economists hardly ever agree on anything.

There are different sub schools as well. In short the Chicago school advocates classical liberalism (promoted heavily by Milton Friedman during the past century). It advocates small government and bigger businesses, but uses empirical evidence to justify its assumptions.

The Austrian school uses a method called praxeology, it uses ''axioms'' (self-evident truths), the main one being that all economic activity is a result of human action. It rejects empirical evidence (although not all its thinkers do, the South African free market foundation under Leon Louw certaintly doesn't). Its criticism against empirical evidence is that economics is a social science and it is impossible to create models in a shifting equilibrium that has absolutely no constants.

Then you have the Kenseyan school, most governments like this one, because its advocates that people should be taxes (although not over taxed) and then government is more likely to create more investment in the economy than private citizens would. Most European socialist governments follow a version of two of this school. They also use empirical evidence and have a fancy word called ''aggregate demand''.

Then you also have monitory policy, fiat currency vs fixed currencies (which is another department of economics).

Here is a video that explains the different schools of thought in classical liberalism (libertarianism )

https://www.youtube.com/watch?v=mc7ucjtzdHg&index=164&list=UUFJNcE0iHj7P6dhp5iCZRLg

Kensyan economics is not there, which is a form of social-liberalism or modern day ''liberalism''.

 

[The_Assimilator]

https://uk.finance.yahoo.com/news/argentina-sues-us-top-un-174334829.html

Argentina sought Thursday to haul the United States before the UN's highest court, accusing Washington of breaching its sovereignty after a US judge blocked it from servicing its restructured debt.
The Argentine government is battling to exit its second default in 13 years after New York District Judge Thomas Griesa froze its June debt payment of $539 million in a US bank.
Griesa's ruling stipulated that the country could not repay those bondholders who had agreed to massive write-downs without also paying two "holdout" creditors the full amount owed them.
The ruling has incensed the Argentine government, which has condemned the judge as biased and appealed to the United States government to intervene.
It took the standoff a notch higher on Thursday by lodging a suit agaisnt the United States at the International Court of Justice (ICJ) in The Hague, saying the country had violated its "sovereign decision" to restructure its debt after its 2001 economic crisis.
"Given that a state is responsible for the conduct of all the branches of its government, these violations have generated a controversy between the Republic of Argentina and the United States, which our country submits to the ICJ for resolution," President Cristina Kirchner's office said in a statement.
But the ICJ said it would not take any action "unless and until the United States of America consents to the court's jurisdiction" -- far from a foregone conclusion given that the US withdrew from the court's general jurisdiction in 1986.
Argentina's messy New York court battle has reopened the accounting morass that followed its 2001 economic collapse, when it defaulted on more than $100 billion in debt amid a crisis it is still battling back from.
The dispute pits the Argentine government against two American hedge funds, NML Capital and Aurelius Capital Management, which bought up Argentine bonds for pennies on the dollar after the 2001 default and sued for full payment.
Argentina says paying the hedge funds -- which it calls "vulture funds" -- the entire $1.3 billion it owes them could trigger legal claims for equal treatment by creditors who had agreed to a 70-percent write-down in deals reached in 2005 and 2010.
- New York hearing Friday -
After Buenos Aires announced it was suing at the ICJ, Judge Griesa called a new hearing in the case for Friday to address "recent statements made by the Republic of Argentina."
Argentina, meanwhile, said the Bank of New York Mellon, where its overdue debt payment of $539 million is frozen, was breaching its contract by obeying the judge's ruling.
The Argentine government took out an advertisement in national newspapers Thursday urging the 92 percent of creditors who have agreed to restructure the country's debt to choose another bank to disburse their payments.
"We remind bondholders that there are various rights -- and consequent legal remedies -- at their disposal... in the event that the fiduciary trustee fails to fulfill its obligations," it said.
It is possible "to remove the fiduciary trustee from its position at any time and designate a successor," it added.
Argentine Economy Minister Axel Kicillof -- who flew to New York last week in a failed bid to resolve the impasse on the eve of Argentina's default -- meanwhile renewed his criticism of Griesa.
"A judge in one jurisdiction can't be allowed to block the debt payments of an entire country," he said. "There's something called sovereignty."

Blah blah blah, we refuse to take responsibility for our own poor decisions so let's blame the USA for our problems and in the process waste more more money we don't have. Sounds like most African countries, it seems South America is rapidly turning into a second Africa in terms of inept governments.

 

[The_Assimilator]

http://abcnews.go.com/International/wireStory/argentina-us-based-bny-mellon-25131992

Argentina Says US-Based BNY Mellon Not Welcome

Bank of New York Mellon, which has played a central role in the legal dispute that pushed Argentina into default last month, is no longer authorized to operate in the South American country, the government said Tuesday.

Argentina has revoked the BNY Mellon's permission to operate because of what Cabinet Chief Jorge Capitanich said was the U.S.-based bank's failure to comply with its duties as trustee of some of the country's bonds.

BNY Mellon has no retail operations in Argentina, so the government's announcement appeared to be part of a plan to remove it as a trustee and work around the U.S. court ruling that triggered a default on July 30.

...

U.S. District Judge Thomas Griesa, who issued the order requiring Argentina to pay the holdout creditors, has said the government's plan to evade his order would be illegal.

And the circus of idiocy continues. Argentina's doing a really good job of ensuring that no banks nor investors will ever want to have anything to do with their economy. Will be interesting to see how badly it ends for them - hopefully the current crop of idiots "running" Argentina (into the ground) will be removed by their voters.

 

[zippy]

firstly it is premised on a coercive theory of tax (as opposed to a consent or assent theory);

secondly it was largely introduced to preserve social class structures of the time - there is something deeply ironic about income tax debates "socialists" believe that by increasing the yield on a progressive income tax you can reduce inequality, the evidence hasn't really supported this - partly because other regressive taxes each up the progressive effect, but mostly because of opportunities for evasion and special interest lobbying;

thirdly it has an incredibly adverse consequences on motivation and incentive - particularly if there is a "super tax" premise introduced, as opposed to graded progressive taxation;

fourthly the alternative case for a flat income tax with basic guaranteed income (such as advanced by Milton Friedman) is more effective at reducing the actual problem of poverty - which is a lack of economic agency;

fifthly it inherently discourages fiscal balancing and effectively compels rejecting the "treasury view" if applied as anything more than an emergency stop gap mechanism, more than anything else income tax drives the unnatural growth of government;

sixthly it lends itself to creating a public discourse of a war on poverty which soon becomes a war on poor people - the overarching thinking of progressive income tax is to manipulate the worse traits of humanity rather than the better;

seventh, once progressive income tax systems start to affect innovation and growth (see thirdly) the natural utilitarian response is to create special exceptions and regulatory capture and crony capitalism is encouraged - in essence progressive income tax is a great way to get back to mercantalism

eighth, whilst the user pay principle ought to be qualified in order to accommodate fortuity and positive externalities, a progressive income tax wholly undermines a user pay premise in the market of those goods and services where taxation becomes a feature. This distorts those markets with persistent negative consequences

Is there any example of the implementation of this alternative. (The flat rate)

 

[Paul Hjul]

Is there any example of the implementation of this alternative .

the most basic alternative is not to have an income tax. Income tax is an incredibly modern phenomena. The movement to income tax in the US was predicated on an outright fraud of the data on the comparison between an income tax and a national sales tax (which in course would become a VAT system) and has been nothing other than a manner to enable politicians to unduly influence wealth distribution - with devastating consequences and a continuous charged debate filled with horse**** on all sides - and the massive growth of the federal government without mandate. Even in this country the 1911 decision to go with income tax completely changed the course of the future of the country.

Going fully into what sort of principles underlie an ethical taxation system really is a long project and is a discussion to be had in a more apt setting. It might be the topic of my sermon to the libertarians at LibSem this year though ...