Wednesday, January 26, 2011

Central planning

We all do it.  In a world which allocates each of us an amount of imprecision to get around, we are smart if we keep government planning minimal so we can allocate the least amount of imprecision to our government model, and reserve more of our imprecision to things local.  Imprecision is wealth, it is a grant to insert flexibility in our decisions, the more imprecision we are allowed, the more flexibility we have in the world. Consider this GE plan the from Mr. Immelt, Obama's new economic guru:
"The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner."
He has allocated more of GE's imprecision to the central government model.

Since 1980 we have watched the elites generate severe problems for us, so we allocate more imprecision to central government, creating complex models of the side effects that elites cause. Eric Cantor causes similarly destructive side effects as does Nancy Pelosi, through the debt channel, as he increases government borrowing.

The simple model is that if one does central planning via government than one pays for it with increased taxes. Eric Cantor, Jeff Sessions and Paul Ryan want more central planning via the debt channel.

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