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patriot45
04-20-2010, 07:26 PM
This will shock the weewee (http://townhall.com/columnists/PhyllisSchlafly/2010/04/20/some_pay,_and_some_receive?page=full&comments=true)




The news that the United States has become a two-class society -- i.e., half of Americans pay federal income taxes and half don't -- has bounced around the media and shocked Americans. Most people had no knowledge of this appalling economic fact.

Even worse is the reality that 40 percent of Americans receive federal government handouts of cash and valuable benefits. Those handouts are financed by the people who do pay federal income taxes.

Those handouts create a tremendous bloc of people who depend on the government for their living expenses. The Tax Foundation reports that 20 percent of Americans now get 75 percent of their income from the federal government and another 20 percent get 45 percent of their income from the government.

Obama's stimulus law will add nearly $800 billion in new means-tested welfare spending over the next decade. That means about $22,500 for every poor person in the United States, which will cost over $10,000 for each family that pays federal income taxes.

According to the Tax Foundation, married taxpayers pay three-fourths of all federal income taxes, whereas two-thirds of single parents who file as head-of-household pay no income tax at all. According to a Heritage Foundation report, taxpayers (mostly those who are married) will spend more than $300 billion providing welfare aid to single parents (mostly women).

The pundits like to divide Republicans into two classes, the fiscal conservatives and the so-called social conservatives, and pretend that their interests are different and mutually exclusive. In fact, the overwhelming reason for big government's extravagant spending, which is properly railed against by limited-government conservatives, is the breakdown in our culture, which social conservatives have been battling for years.

If limited-government conservatives are dreaming of taking back America for fiscal sanity in the November elections, they should study how the unprecedented decline in marriage and the increase in illegitimacy are the major causes of our bloated government and its gigantic welfare spending.

In 2008, 40.6 percent of children born in the United States were born outside of marriage; that's 1,720,000 children. This is not, as the media try to tell us, a teenage problem.

Only 7 percent of those illegitimate babies were born to girls under age 18, and over three-fourths were born to women over age 20. The problem is the collapse of marriage as the social institution responsible for the costs of the care of children.

The fiscal conservative faction of the Republican Party should also study why Republicans won their big congressional majority in 1994 and what has happened since. The Democratic Party's welfare boondoggle was a major reason for the Republican victory.

continued (http://townhall.com/columnists/PhyllisSchlafly/2010/04/20/some_pay,_and_some_receive?page=2)

MrsSmith
04-20-2010, 08:26 PM
This will shock the weewee (http://townhall.com/columnists/PhyllisSchlafly/2010/04/20/some_pay,_and_some_receive?page=full&comments=true)





continued (http://townhall.com/columnists/PhyllisSchlafly/2010/04/20/some_pay,_and_some_receive?page=2)

The "rich" carry the Feds...but the poor and lower middle class carry the local and state taxes. http://www.stateline.org/live/ViewPage.action?siteNodeId=136&languageId=1&contentId=90694
http://www.cbpp.org/cms/index.cfm?fa=view&id=2976

Rockntractor
04-20-2010, 08:38 PM
Wealth redistribution. Social justice?:mad:

Wei Wu Wei
04-20-2010, 08:50 PM
DId someone say two-class society?

http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_1.gif

patriot45
04-20-2010, 08:52 PM
http://i73.photobucket.com/albums/i230/patriot45270/obama/scrat2.jpg

Wei Wu Wei
04-20-2010, 08:55 PM
In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate.

From Wolff (2009).

Rockntractor
04-20-2010, 08:57 PM
DId someone say two-class society?

http://sociology.ucsc.edu/whorulesamerica/power/images/wealth/Figure_1.gif
Earn it bitch!

patriot45
04-20-2010, 08:58 PM
In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate.

From Wolff (2009).

Are you alan colmes?

Wei Wu Wei
04-20-2010, 09:01 PM
Earn it bitch!

Studies show that attainment through one's life is approx. 50% based on the family you were born into and 50% based on other factors (including hard work, dedication, as well as unpredictable factors such as luck and chance)

The income level and education level of one's parents is a HUGE predictor of where one will end up.

Granted, it's not all about where you are born, this isn't a caste system, but the opposite idea that our system is totally merit-based is just as silly.

(keep in mind I'm a living example of someone who's moved up considerably, only one of my parents finished high school, I was born in the ghetto, I was the only one of my siblings to finish high school and attended a Top state university and have excelled professionally since then. I realize that hard work is important, but I'm also not blind to the fact that where you are born determines the opportunities you have)

Wei Wu Wei
04-20-2010, 09:01 PM
Are you alan colmes?

Yes keep talking about me instead of the numbers and facts.

fettpett
04-21-2010, 05:28 PM
here WWW, check this out http://www.rushlimbaugh.com/home/menu/cy2003.guest.html

forget it's from Rush, 96% of all taxes are paid by the top 50% of wage earners.

Wei Wu Wei
04-21-2010, 06:33 PM
here WWW, check this out http://www.rushlimbaugh.com/home/menu/cy2003.guest.html

forget it's from Rush, 96% of all taxes are paid by the top 50% of wage earners.

If 99 people have a dime, and I have $100, and everyone is taxed THE SAME (flat) rate (let's say, 10%), then the total tax revenue is $10.99, which means over 90% of all taxes are paid by the top 1%

TALK ABOUT AN UNFAIR TAXING SYSTEM THOSE AT THE TOP ARE PAYING ALL THE TAXES IF ONLY WE HAD A FLAT TAX RA-....oh wait....

MrsSmith
04-21-2010, 06:53 PM
If only our government had remained at the level permitted by the Constitution, we wouldn't require theft-by-taxes.

Wei Wu Wei
04-21-2010, 07:46 PM
If only our government had remained at the level permitted by the Constitution, we wouldn't require theft-by-taxes.

Yes. As technology, ideas, demographics, global economies, industries, slavery systems, and essentially every aspect of our society has changed, the answer is a government that doesn't change.

This is how to remain strong: NEVER CHANGE. REMAIN RIGID IN THE FACE OF ALL CHANGES.

That's why they make tall buildings perfectly rigid, so they can withstand the forces of the wind and earthquakes.

That's why species continue to survive when the environment changes, they simply never change.

That's why when you make mistakes the solution is to continue doing the same thing over and over, every time you fail, making sure to be EVEN MORE RIGID until you finally succeed.

This is wisdom.

Big Guy
04-21-2010, 08:02 PM
Yes. As technology, ideas, demographics, global economies, industries, slavery systems, and essentially every aspect of our society has changed, the answer is a government that doesn't change.

This is how to remain strong: NEVER CHANGE. REMAIN RIGID IN THE FACE OF ALL CHANGES.

That's why they make tall buildings perfectly rigid, so they can withstand the forces of the wind and earthquakes.

That's why species continue to survive when the environment changes, they simply never change.

That's why when you make mistakes the solution is to continue doing the same thing over and over, every time you fail, making sure to be EVEN MORE RIGID until you finally succeed.

This is wisdom.

I like Change, when my mag is empty, I change it. Simple. :D

malloc
04-21-2010, 08:10 PM
If 99 people have a dime, and I have $100, and everyone is taxed THE SAME (flat) rate (let's say, 10%), then the total tax revenue is $10.99, which means over 90% of all taxes are paid by the top 1%

TALK ABOUT AN UNFAIR TAXING SYSTEM THOSE AT THE TOP ARE PAYING ALL THE TAXES IF ONLY WE HAD A FLAT TAX RA-....oh wait....

Let's contrast this with the current system:

Under the flat tax system of 10% your example yields $10.99 for the government with $98.91 remaining in private hands to further business, purchase products, or invest.

Under our system, the guys with only a dime will be taxed at a 0% rate, and the guy with $100 will be taxed at 39.6% so we'll just say 40% to keep the math simple. Total government revenue would then be $40 leaving only $69.90 left in private hands to further business, purchase products or invest.

With the private sector cash flow gutted, then businesses will only be able to move 60% of the products they could have moved had more money remained in private hands. Therefore the 99 people with only a dime to their name, will remain single dime owners for longer than if economic conditions were benefited by the $29.01 which was removed from the market via taxation. Which of these systems would yield a healthier economy for all involved?

A prosperous and healthy economy isn't a function of who pays the taxes, or what each individual's rates amount to. A prosperous and healthy economy builds from entrepreneurship, and the less capital that exists after taxes, the less entrepreneurship there will be.



Yes. As technology, ideas, demographics, global economies, industries, slavery systems, and essentially every aspect of our society has changed, the answer is a government that doesn't change.


Yes, technology has changed, as have ideas, economies, etc. However, the function these changes serve have not, and will not change. Technology serves the function of making life easier, more entertaining, or more efficient. Economies serve the function of creating a system of exchange. So, no, the brass tacks, the Civics 101 of government should not change.

A governments function is to protect the rights of the people and it can serve no other legitimate function. It is the imposition of government into areas that aren't under the purview of this function that most of America is currently objecting to. Sure, government can use newer ideas or technologies to serve this function, but the function itself should not change. Any deviation from protecting the rights of the people immediately translates into infringing on the rights of the people, which is in direct conflict the primary goal of government.

Jfor
04-21-2010, 08:14 PM
Let's contrast this with the current system:

Under the flat tax system of 10% your example yields $10.99 for the government with $98.91 remaining in private hands to further business, purchase products, or invest.

Under our system, the guys with only a dime will be taxed at a 0% rate, and the guy with $100 will be taxed at 39.6% so we'll just say 40% to keep the math simple. Total government revenue would then be $40 leaving only $69.90 left in private hands to further business, purchase products or invest.

With the private sector cash flow gutted, then businesses will only be able to move 60% of the products they could have moved had more money remained in private hands. Therefore the 99 people with only a dime to their name, will remain single dime owners for longer than if economic conditions were benefited by the $29.01 which was removed from the market via taxation. Which of these systems would yield a healthier economy for all involved?

A prosperous and healthy economy isn't a function of who pays the taxes, or what each individual's rates amount to. A prosperous and healthy economy builds from entrepreneurship, and the less capital that exists after taxes, the less entrepreneurship there will be.



Yes, technology has changed, as have ideas, economies, etc. However, the function these changes serve have not, and will not change. Technology serves the function of making life easier, more entertaining, or more efficient. Economies serve the function of creating a system of exchange. So, no, the brass tacks, the Civics 101 of government should not change.

A governments function is to protect the rights of the people and it can serve no other legitimate function. It is the imposition of government into areas that aren't under the purview of this function that most of America is currently objecting to. Sure, government can use newer ideas or technologies to serve this function, but the function itself should not change. Any deviation from protecting the rights of the people immediately translates into infringing on the rights of the people, which is in direct conflict the primary goal of government.

And that ladies and gentleman, is how weewee got schooled.

Wei Wu Wei
04-21-2010, 08:58 PM
Let's contrast this with the current system:

Under the flat tax system of 10% your example yields $10.99 for the government with $98.91 remaining in private hands to further business, purchase products, or invest.

"private hands" isn't a general group, while some people can keep their 9 cents, the majority of what's left in private hands is in the hands of the top 1%. They may further business or purchase products, Or you could put that money into a bank and let it sit for many years and live off of the interest. Or you could take that money and gamble with it. Or best of all, if you own enough of the private industry, you can simply pay your workers as little as legally possible and take your profits to congress and have them reject any measures to benefit the bottom 99%. Then you can push for, and likely succeed in getting a consumption tax so that not only do the bottom 99% have to work for you and give their paychecks right back to you in order to buy things, but they get taxed for doing so, and a larger percentage of their income is taxed. nice.


Under our system, the guys with only a dime will be taxed at a 0% rate, and the guy with $100 will be taxed at 39.6% so we'll just say 40% to keep the math simple. Total government revenue would then be $40 leaving only $69.90 left in private hands to further business, purchase products or invest.

When the average income of 99% of the population is $0.10, $69.90 is a lot of money. However, now the government has a huge sum of money too. They can issue that out in the form of tax credits for any dime-people who want to start a business of their own. They can use that to pay for health care and education expenses so that 99% is more likely to remain healthy and with a better education are more likely to rise above the dime-mark. So, the top 1% has been gutted, and now only owns $6, but these programs have now raised the average disposable income of the majority, excluding the very top significantly, say from 10 cents to 14 cents, which is a 40% increase in their income.

That 40% increase is huge and is most likely going to be spent paycheck to paycheck, which boosts the businesses owned by the top 1%, which in turn increases his income and REQUIRES that he expand his business simply to meet the booming demand.

When the money goes to the top, they MAY expand their business, but the truth is that unemployment is good for business owners because it allows them to negotiate for very low wages for their workers, and if there is no demand for their product, business expansion is pointless and putting the money in a savings account is more logical.

When the money goes to the bottom, they (almost) ALWAYS spend all of it (because they have to, they don't have the luxury of fat savings accounts and capital gains), so that money ALWAYS goes right into the private business sector, which REQUIRES that these businesses expand in order to keep up with the demand.

While the Top 1% may experience decrease in his income, the business grows, demand for products is higher, and more people are employed to meet the demands caused by increased spending.

(clearly, these examples are extremely oversimplified, but this is the clearest example of why a complete allegiance to trickle-down economics is flawed. while putting money directly in the hands of the poor will not work, using tax money and investing it in programs that will (long-term) raise the disposable income of the lower class benefits everybody, although it benefits the super wealthy a little less than a flat tax rate would)


With the private sector cash flow gutted, then businesses will only be able to move 60% of the products they could have moved had more money remained in private hands. Therefore the 99 people with only a dime to their name, will remain single dime owners for longer than if economic conditions were benefited by the $29.01 which was removed from the market via taxation. Which of these systems would yield a healthier economy for all involved?

You're assuming that the government simply burns taxes in a furnace. This money goes to fund programs, projects, and tax credits. Assuming proper programs were put in place (education programs, job training, health care, ect), it would raise the disposable income of the 99 people allowing them to purchase more of the products that the 1 guy owns.


A prosperous and healthy economy isn't a function of who pays the taxes, or what each individual's rates amount to. A prosperous and healthy economy builds from entrepreneurship, and the less capital that exists after taxes, the less entrepreneurship there will be.

A growing economy isn't any good if the part that is growing is in the hands of the top 1%. Entrepreneurship is extremely imporant, but the focus should be on small business owners and other starting entrepreneurs, not mega-corporations who already dominate the system, by boosting the chances of the poor getting an education, getting proper education, and by cutting taxes on small business, then you increase the chances that more entrepreneurs will enter the system, and with the government supporting them, you get more job growth from the bottom, which results in increased competition which ultimately lowers prices and gives workers slightly more leverage.




Yes, technology has changed, as have ideas, economies, etc. However, the function these changes serve have not, and will not change. Technology serves the function of making life easier, more entertaining, or more efficient. Economies serve the function of creating a system of exchange. So, no, the brass tacks, the Civics 101 of government should not change.

Robotics made life easier for owners of production companies, but they displaced the jobs of millions of people.

The internet and telecommunications have allowed companies to outsource many service-sector jobs, causing millions of Americans to lose their jobs.

The rise of industry totally changed the nation. Once based on agriculture and small-time markets (which is where capitalism is at it's best, smaller businesses, lots of competition), the industrial revolution changed all of that.

Some things are so basic and obvious, such as slavery, which was a very rigidly ingrained economic institution which the government actively supported and which was supported by the founding fathers. Times changed, slavery ended, and the economic picture of America shifted, was the Government supposed to still be enforcing slavery law?

Our education system was based on an agricultural society, which failed many who were unable to succeed in the industrial marketplace because they had no skills beyond simple manual labor. Our education system was then based on a manufacturing economy and in the last half century we've seen how a high school diploma has become next to useless in the modern market, and now our education system which is still a hybrid of a manufacturing system and service sector system unfortunately is not responding to the rise of the Global Economy, and we are less and less able to compete with workers from other nations with superior education systems and thus more skilled.

I hear a lot of people telling me I cannot compare today's societal reality to that of the 50's or 60's, but it's far more absurd to compare today to the late 18th century and expect that our modern problems can be solved by using the solutions of another time, another place, and frankly another reality.


A governments function is to protect the rights of the people and it can serve no other legitimate function.

Education was not considered a right for a very long time. Voting (the most basic right in a democratic-based system) was not considered an equal right until last century. If you asked people in 1840 what are the rights of people you'd get a far different answer than if you asked in 1920 and again a far different answer if you asked in 1950 and again a far different answer if you asked again in 1980.

It is the people who stood up and demanded their rights, and when they did, they got their government to protect those rights.

If the government is of the people, by the people, and for the people isn't it the right of the people to use the government to better their society via policy and programs?

Constitutionally Speaking
04-21-2010, 09:09 PM
In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate.

From Wolff (2009).


And pay far greater percentages of the tax burden than this DESPITE ALSO providing the majority of jobs to society and proportionally a larger amount of the charity.

We ought to PAY the rich for the services they render.

patriot45
04-21-2010, 09:27 PM
Yes. As technology, ideas, demographics, global economies, industries, slavery systems, and essentially every aspect of our society has changed, the answer is a government that doesn't change.

This is how to remain strong: NEVER CHANGE. REMAIN RIGID IN THE FACE OF ALL CHANGES.

That's why they make tall buildings perfectly rigid, so they can withstand the forces of the wind and earthquakes.

That's why species continue to survive when the environment changes, they simply never change.

That's why when you make mistakes the solution is to continue doing the same thing over and over, every time you fail, making sure to be EVEN MORE RIGID until you finally succeed.

This is wisdom.

You're an ass, why do you even bother waking up in the mornings?

http://i73.photobucket.com/albums/i230/patriot45270/normal_demotivational-posters-rock-.jpg

malloc
04-21-2010, 10:08 PM
"private hands" isn't a general group

Please don't attempt to instruct me, or drop little bits of "knowledge" on me in the area of markets and economics. It incites fits of laughter which make my replies very difficult.

Private Sector: The part of a nation's economy that isn't controlled by the government.
-- The Dictionary

Yep, that's a pretty general group isn't it?



while some people can keep their 9 cents, the majority of what's left in private hands is in the hands of the top 1%.


Class envy and economics don't mix, and it leads to people having some pretty ridiculous ideas about what government should do with the market. The top 1% also happen to be the employers. Jim & Christy Walton of Walmart employ 2,100,000. Bill Gates employs 93,000. Lawrence Ellison of Oracle Corp employs 101,950. Warren Buffet of Berkshire Hathaway employs 246,000. The list goes on and on. Sure their rich and sure they don't donate all their personal wealth to their employees. What you don't understand is that this practice of keeping one's profits is fair and just. Why would they ever create a business in the first place, employ 2,500,000 people, if there was nothing to gain from it. The corporations, and the 2,500,000~ jobs they created wouldn't exist if the profit motive didn't exist.

I'll simplify it for you: No profit motive yeilds no entrepreneurship, which in turn yields high unemployment

Before we go any further, I want you to familiarize yourself with this word:

Profit Motive: Chance of generating a surplus of revenue over all costs the reason most people start and stay in a business.
-- The Dictionary



When the average income of 99% of the population is $0.10, $69.90 is a lot of money. However, now the government has a huge sum of money too. They can issue that out in the form of tax credits for any dime-people who want to start a business of their own. They can use that to pay for health care and education expenses so that 99% is more likely to remain healthy and with a better education are more likely to rise above the dime-mark. So, the top 1% has been gutted, and now only owns $6, but these programs have now raised the average disposable income of the majority, excluding the very top significantly, say from 10 cents to 14 cents, which is a 40% increase in their income.


This is a fine daydream, but let me tell you how it works in the real world of business and economics. The government confiscates the $40, reducing the profits of Mr. $100 to only $60. Mr. $100's profit motive just took a significant hit. In order maintain the profit motivation necessary to even bother with his business, he must now either raise prices, lay off workers, move his business to a more tax-friendly place, or just say screw it and close shop. What kind of effect does this have on both government and the dime-people? The dime people are either paying more for goods with their government redistribution or they are looking for work or they are earning less in wages. If the business moves or closes, the government just lost a cash cow, and must now inflate the currency in order to cover the previous levels of entitlements. That means that the dime-people are not only out looking for work, but their currency loses purchasing power as well.



That 40% increase is huge and is most likely going to be spent paycheck to paycheck, which boosts the businesses owned by the top 1%, which in turn increases his income and REQUIRES that he expand his business simply to meet the booming demand.


You are arguing the Keynsian principle of boosting aggregate demand. Did you actually read The General Theory? If so, congrats. Unfortunately this theory doesn't hold much water. The ineffective bailouts proved it. What really happens is business owners ask themselves, "Why would I expand, or open new branches, just to fund the government? What's in it for me?" Then demand is boosted, but supply isn't very stimulated and prices rise. You should read The Fatal Conceit by F.A. Hayek next so that you can fix what you learned from The General Theory. Hayek describes the erroneous logic of redistributing wealth in order to boost aggregate demand very well. Heavy taxation on "Rich People" not only hits their profit motive, but also their capital structure as a whole, which has negative effects on the supply side, as well on employment.



When the money goes to the top, they MAY expand their business, but the truth is that unemployment is good for business owners because it allows them to negotiate for very low wages for their workers, and if there is no demand for their product, business expansion is pointless and putting the money in a savings account is more logical.


Unemployment is not good for business owners! If there is a 20% unemployment rate, that's 20% less people who are likely to buy products. How is that good for business? Wages is a market in and of itself. Wage prices, meaning salary, benefits, etc. are set by competition, not by decree of a CEO. If the CEO of Oracle decided he was only going to pay programmers $25,000 while Microsoft was paying them $50,000 Microsoft would have the pick of the litter and Oracle would be less competitive.

Finally, when money goes into a savings account, what happens to it? It doesn't just sit in the bank does it? So even money which is sitting in a bank account, which is not confiscated by the government, is being funneled into areas of the market that have greater demand, and require expansion. The government is historically inept at funneling this capital to the places in the market it is needed, but the entrepreneurs themselves have been historically very efficient at it. Also, when the government starts taxing the heck out of the rich, redistributing wealth, and trying to steer the economy what happens? Those dreaded lobbyists that you love to hate come out of the wood work and try to bribe congress to steer the economy their way. The government created the lobbyist problem, more government certainly isn't going to fix it. If D.C. didn't have it's hand in the pockets of the market, lobbyist's wouldn't exist.



You're assuming that the government simply burns taxes in a furnace. This money goes to fund programs, projects, and tax credits. Assuming proper programs were put in place (education programs, job training, health care, ect), it would raise the disposable income of the 99 people allowing them to purchase more of the products that the 1 guy owns


I know where the money goes. Mostly it goes to welfare and warfare and servicing the debt. The money that goes to servicing the debt might as well be thrown into a furnace for the purposes of this discussion. The money that goes to defense is way too much. The money that goes to welfare programs hurts the market and the economy for reasons I've already explained above.

The rest of your post is pretty much these arguments rehashed, so I'll cut it off here. Except the part about the role of government. It's really just basic civics that everyone should know. Rights can't be added or granted. Rights are something you inherently posses since birth. Unless this younger generation is born differently than I was, there aren't any "new" rights to protect.

Right: a power, privilege, faculty, or demand inherent in one person and incident upon another.
Powers of free action/something that you have the sovereign authority to do because there is no higher power to get permission from.
-- Michael Badnarik

Health care, government cheese, food stamps, none of that fits this definition. By doing these things, government has stopped protecting our rights, and has begun to infringe upon them.

Wei Wu Wei
04-26-2010, 11:48 AM
Please don't attempt to instruct me, or drop little bits of "knowledge" on me in the area of markets and economics. It incites fits of laughter which make my replies very difficult.

Private Sector: The part of a nation's economy that isn't controlled by the government.
-- The Dictionary

Yep, that's a pretty general group isn't it?

Yes and if we choose to use the general group of "American Citizens" then we can also include the entire Government.

The Private Sector isn't some homogenous group, the vast majority of capital is in the hands of a very few people at the very top.

This isn't unnatural, this sort of stratification happens in all societies but in most societies working class and middle class people realize that their economic and political interests are NOT the same as those of the ultra-wealthy. The top 400 individuals own over $1.25 Trillion, that's only 400 people out of a nation of over 300,000,000.

I'm not arguing that inequality is inherently wrong, but only that our level of inequality is unprecedented in the industrialized world and somehow working and middle class people seem to identify with the interests of the wealthy.

The most basic example, an employer and employee. It's a crucial balance, they need each other for support, and they negotiate with each other for the value of labor. The employer needs the worker's labor, and invest that into his product which he then sells for profit. The employee needs the employers job trading his specific labor for wage. No one is talking about dismantling one or the other. What I am saying is that it should be obvious that these two inter-dependent parties are at odds with each other in terms of their interests, just like any two parties in any exchange of goods of services. They have a co-dependent adversarial relationship.

To ignore this most basic divisions, (as well as the further complex divisions within employers and employees), is elementary and paints an incorrect picture that "private hands" is a homogeneous group.




Class envy and economics don't mix, and it leads to people having some pretty ridiculous ideas about what government should do with the market. The top 1% also happen to be the employers. Jim & Christy Walton of Walmart employ 2,100,000. Bill Gates employs 93,000. Lawrence Ellison of Oracle Corp employs 101,950. Warren Buffet of Berkshire Hathaway employs 246,000. The list goes on and on. Sure their rich and sure they don't donate all their personal wealth to their employees. What you don't understand is that this practice of keeping one's profits is fair and just.

1. I again and again recognize the necessecity of these people as job-creators and as the engines of enormous wealth accumulation in our nation. Not to mention cheap goods and services that we all enjoy. I am not arguing that these people are inherently evil or that we need to purge them from society.

2. The evaluation of profits as fair and just is a moral judgement, and as such is far more open to interpretation than anything else we are talking about here. Some on one extreme argue that it's totally fair and just, profit is earned through work and investment and ANY level of taxation is punishment, wrong, and abhorrent to a free economy. Others on the other far extreme would argue that the profits of owners is inherently wrong and unjust in itself, as it relies on the exploitation of workers, who do every bit of work in producing whatever is sold, imparting their own labor value into the product, which they are unfairly compensated for simply because the owner assumes that everything is his.

These of course are extreme levels of thought, there's a wide range of views between these on the spectrum, and there are also other levels and ways to look at this beyond that simple 1-dimensional dichotomy.




Why would they ever create a business in the first place, employ 2,500,000 people, if there was nothing to gain from it. The corporations, and the 2,500,000~ jobs they created wouldn't exist if the profit motive didn't exist.

You're arguing against an extreme position that no one here is advocating. No one is talking about removing the profit motive. No one is talking about taxing the rich at 100% in all of their assets. No one is talking about purging corporations from society.

A person on their way to becoming a multibillionaire isn't going to suddenly give up his dreams and join the welfare roles because he only gets 1.2 Billion dollars rather than 1.8 Billion dollars.

No one is even saying there shouldn't be rich people, but a 7-10% tax increase on the wealthiest individuals isn't exactly going to leave them walking around in bread-bag shoes.

No one with the education, skills, connections, and drive to become wealthy is going to decide "oh well nevermind I'll just sit around and watch the price is right all day" simply because they have a slightly higher tax rate.

This argument about removing profit motive is absurd because no one is arguing for that, (except perhaps socialists a century ago).


I'll simplify it for you: No profit motive yeilds no entrepreneurship, which in turn yields high unemployment

Yes I agree as I'm sure everyone does. This is why I do not support the "NO PROFIT" policy.



Before we go any further, I want you to familiarize yourself with this word:

Profit Motive: Chance of generating a surplus of revenue over all costs the reason most people start and stay in a business.
-- The Dictionary

Yep.




This is a fine daydream, but let me tell you how it works in the real world of business and economics. The government confiscates the $40, reducing the profits of Mr. $100 to only $60. Mr. $100's profit motive just took a significant hit. In order maintain the profit motivation necessary to even bother with his business,

Gotta stop you right here. Are you suggesting that any reductions in profit removes any motivation to even bother stay in business? Forget the fact that the business still brings in a regular income that is far higher than the vast majority of the population, just because he gets a little less you think he's going to just give it all up and go become a monk?

Profits constantly go up and down in the market, with the values of stocks in corporations. Do you see the CEOS and other top executives simply saying "well I think I'll give up this thing I've been working on my whole life, maybe I'll go become a starving artist" just because he's making $7.8 Million per year rather than $9.9 Million per year?

And then what happens to his business? He just closes it down, puts all of the money earned into a big pile and burn it?

NO ONE IS TALKING ABOUT DISMANTELING CORPORATIONS OR MAKING THE WEALTHY POOR.


he must now either raise prices,

Which makes him less competitive against his peers, not a good idea


lay off workers,

unless tax incentives are in place to help support the financial burden of paying workers. tax cuts and other policies can encourage employers to hire and keep employees, this effect isn't necessary if proper policies are in place.

Also, keep in mind there's a difference between taxing corporate profits and taxing wealthy individuals, the former being the one the influences companies in a certain way. A top exec firing thousands of his employees just because his bonus check $600 million rather than $900 million is messed up.


move his business to a more tax-friendly place,

Where's that, exactly? The tax rates, especially on the wealthy, are far higher in other advanced nations. Besides, most companies today are already trans-national, they employ labor from all over the world but setting up base in the United States is going to yield far lower tax rates than in Europe or other advanced nations.


or just say screw it and close shop.

No. This won't happen.

PoliCon
04-26-2010, 11:54 AM
In terms of types of financial wealth, the top one percent of households have 38.3% of all privately held stock, 60.6% of financial securities, and 62.4% of business equity. The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate.

From Wolff (2009).

Will you ever stop being such a worthless cockmonkey and start offering real and verifiable sources for your bullshit claims? Wolff (2009) would not even count in a middle school paper as an acceptable notation. :rolleyes:

Wei Wu Wei
04-26-2010, 12:21 PM
What kind of effect does this have on both government and the dime-people? The dime people are either paying more for goods with their government redistribution or they are looking for work or they are earning less in wages.

Well, keeping my replies in mind, we would also have to think about how the tax money is spent. If it's helping the dime people to get better educations, better wages, better working conditions, and better coverage over necessary expenses (like health care) then it's affecting them pretty well. Again, you can't run this to the extreme and simply take away 100% of wealthy people's income and giving it directly to the homeless. That's not what we're talking about.

If unemployment is higher, better unemployment benefits can be put in place and training programs can be funded to give out of work people a larger variety of skills to compete.

If small business are boosted (via tax cuts and government credits for "good hiring and employing practices") as the expense of 10% of a billionaires income, then that would increase small business employment, who should also have lower tax rates to increase their growth, which would increase competition, and allow our capitalist system to work better overall.


If the business moves or closes, the government just lost a cash cow, and must now inflate the currency in order to cover the previous levels of entitlements. That means that the dime-people are not only out looking for work, but their currency loses purchasing power as well.

They won't move anywhere because our tax rates are still be far the lowest. As for unemployment these companies are already outsourcing their labor, which costs Americans jobs but fattens the wallets of the owners of the companies.

Tax cuts, and other incentives for domestic hiring can be put in place, to make domestic hiring more viable. Again, it would cut a small percent of the income of a billionaire, but these policies would keep the profit margin high and shareholders satisfied.






You are arguing the Keynsian principle of boosting aggregate demand. Did you actually read The General Theory? If so, congrats. Unfortunately this theory doesn't hold much water. The ineffective bailouts proved it.

Bailing out leading corporations, without regulations on how to use the money, which they then used to pay their top executives millions in bonuses is hardly a Keynsian policy.


What really happens is business owners ask themselves, "Why would I expand, or open new branches, just to fund the government? What's in it for me?"

How about the millions of dollars you could make, even if you're only making $3 million per year rather than $4.8 Million per year, most Americans see that as a pretty damn good motivation. This criticism only holds up if they are going to make less money as the owner of a major corporation than they would as a worker or unemployed, which is absolutely absurd.


Then demand is boosted, but supply isn't very stimulated and prices rise.

Supply would be stimulated by cutting taxes as a function of investment in supply.

Simply cutting taxes on the wealthy doesn't increase supply, suppose taxes were cut based on how much you invest in growing your supply rather than simply cutting taxes?

The trickle-down theory only holds up if tax cuts are aimed at business growth and supply investment, which it is not always. It COULD be done, but strangely none of the supply-side supporters like that route.

If we are cutting taxes on the wealthy to stimulate their business growth, then the tax cuts should be conditional upon business investment, it should not be done under the assumption that they will do it.

If the dime people have more disposable income, there's very little question about what they are going to do with it. They are going to spend it, because they don't have the luxury of having financial assets bringing in large capital gains to live off of. You say this would cause prices to rise? That's only if only one company exists, a company can raise it's profits in the hight of a demand-boost, hoping to increase profits, but there is still competition. Another company can keep it's prices low, and get far more patronage, far more business, and thus more profit. More business requires more employees, so more people get jobs.


You should read The Fatal Conceit by F.A. Hayek next so that you can fix what you learned from The General Theory. Hayek describes the erroneous logic of redistributing wealth in order to boost aggregate demand very well. Heavy taxation on "Rich People" not only hits their profit motive, but also their capital structure as a whole, which has negative effects on the supply side, as well on employment.

I haven't read the Fatal Conceit but could you give me a run-down of his/her logic in supporting these arguments?





Unemployment is not good for business owners! If there is a 20% unemployment rate, that's 20% less people who are likely to buy products. How is that good for business? Wages is a market in and of itself. Wage prices, meaning salary, benefits, etc. are set by competition, not by decree of a CEO. If the CEO of Oracle decided he was only going to pay programmers $25,000 while Microsoft was paying them $50,000 Microsoft would have the pick of the litter and Oracle would be less competitive.

Extremely high unemployment is bad for everyone, but marginal unemployment is a good thing because it allows employers to negotiate far lower wages for their employees.



Finally, when money goes into a savings account, what happens to it? It doesn't just sit in the bank does it? So even money which is sitting in a bank account, which is not confiscated by the government, is being funneled into areas of the market that have greater demand, and require expansion.

Assuming they put the money into an American bank, which they don't need to do.


The government is historically inept at funneling this capital to the places in the market it is needed, but the entrepreneurs themselves have been historically very efficient at it. Also, when the government starts taxing the heck out of the rich, redistributing wealth, and trying to steer the economy what happens?

In the 50's and 60's the tax rates on the wealthy were extremely high, and there were many programs aimed at lower income people, resulting in the largest increase in the middle class in history.

It's not fair to use the blanket term "Government". Some policies work, some fail, some have unintended consequences, some are unpredictable. It's like politiciams who cut funding for medicaid and then later use the failing medicaid system as proof that "government doesn't work".


Those dreaded lobbyists that you love to hate come out of the wood work and try to bribe congress to steer the economy their way. The government created the lobbyist problem, more government certainly isn't going to fix it. If D.C. didn't have it's hand in the pockets of the market, lobbyist's wouldn't exist.

Lobbyists have more functions than simply trying to 'bribe' congress.




I know where the money goes. Mostly it goes to welfare and warfare and servicing the debt. The money that goes to servicing the debt might as well be thrown into a furnace for the purposes of this discussion. The money that goes to defense is way too much. The money that goes to welfare programs hurts the market and the economy for reasons I've already explained above.

Except that everyone wants the debt to be paid off, so any money put towards it, while it doesn't help us directly, is helping us down the road.

Yes defense spending is a bit excessive but it's also the source of many jobs.

I still disagree with your reasons above.




The rest of your post is pretty much these arguments rehashed, so I'll cut it off here. Except the part about the role of government. It's really just basic civics that everyone should know. Rights can't be added or granted. Rights are something you inherently posses since birth. Unless this younger generation is born differently than I was, there aren't any "new" rights to protect.

Right: a power, privilege, faculty, or demand inherent in one person and incident upon another.
Powers of free action/something that you have the sovereign authority to do because there is no higher power to get permission from.
-- Michael Badnarik

Health care, government cheese, food stamps, none of that fits this definition. By doing these things, government has stopped protecting our rights, and has begun to infringe upon them.

Everyone already agrees that some level of health care is a right. No one supports removing ER rooms or 911 emergency services. The question is where do we draw the line?

This is the question of rights throughout history. Everyone agreed from the start of the republic that voting is a right, but we've changed the level of that right to include non-land owners, minorities, 18 year olds, and women. Voting is a right, how far does that right extend is something that is up to debate.

Most rights that were written in the constitution did not apply to slaves, again, the rights were set but the level to which they were applied has changed over time.

Everyone agrees that citizens have a right to health care services, the question at hand now is to what degree does that right extend. That is NOT a clear-cut answer that's written in stone, and it's something we are deciding right now. There are many reasons, economic and otherwise to clarify how far this right extends, but I consider it a moral issue as well.

NJCardFan
04-26-2010, 02:23 PM
Maybe this will help wee wee(although I highly doubt it). This is a thing that has been floated around the internet for years. It's called The U.S. Tax system Explained Through Beer (http://scottnolansmith.wordpress.com/2008/10/15/us-tax-system-explained-through-beer/):


Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

* The first four men (the poorest) would pay nothing.
* The fifth would pay $1.
* The sixth would pay $3.
* The seventh would pay $7.
* The eighth would pay $12.
* The ninth would pay $18.
* The tenth man (the richest) would pay $59.

So, that’s what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20.” Drinks for the ten now cost just $80 total.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’ They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

* The fifth man, like the first four, now paid nothing (100% savings).
* The sixth now paid $2 instead of $3 (33%savings).
* The seventh now pay $5 instead of $7 (28%savings).
* The eighth now paid $9 instead of $12 ( 25% savings).
* The ninth now paid $14 instead of $18 ( 22% savings).
* The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

“I only got a dollar out of the $20,” declared the sixth man. He pointed to the tenth man,”but he got $10!”

“Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar, too. It’s unfair that he got ten times more than I!“

“That’s true!!” shouted the seventh man. “Why should he get $10 back when I got only two? The wealthy get all the breaks!“

“Wait a minute,” yelled the first four men in unison. “We didn’t get anything at all. The system exploits the poor!“

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

lacarnut
04-26-2010, 02:37 PM
Are you alan colmes?

No, this pissant is a freeloader who pays no Fed. Income Tax. BTW, you do not get to frame the debate around here. You and your ilk are the problem. Got it Whitebread.

malloc
04-26-2010, 05:28 PM
Yes and if we choose to use the general group of "American Citizens" then we can also include the entire Government.
..SNIP..



I didn't write the dictionary, what I did was learn the terminology, you didn't learn the terminology so you choose to write the dictionary as you go out of ignorance. You don't have the option of using the terminology incorrectly, and then instructing me on how you use terminology incorrectly.

If you are going to discuss the material, then learn the material.



This isn't unnatural,..snip..



You are arguing that government should take from the rich to provide for the poor. Therefore you are arguing that the rich should be punished for acquiring wealth, while the poor should be rewarded for not acquiring wealth. Therefore you are most certainly arguing that inequality is wrong if you wish to punish those who are on the beneficial end of inequality while rewarding those on the disadvantaged end. Either that, or you are arguing that having wealth isn't inherently wrong, but it should be punished anyway. It's beginning to appear as though you don't even understand your own argument.




The most basic example, ..snip...


The person who believes unemployment is good for business and that wages are a function of CEO decree is now attempting to explain to me the employment relationship. Of course, you would get it wrong.

Employment Relationship: In mainstream economics employment is seen as a mutually-advantageous transaction in a free market between self-interested legal and economic equals
--The Dictionary

Of course employment is mutually advantageous, otherwise it wouldn't happen. Yes both parties are self interested, that is nature and there is no way legislate around it. However, notice the "mutually-advantageous" clause. I'm sure everyone wants to be a billionaire, but I know for a fact that very few actually have the desire, knowledge or motivation necessary to found and run a company like Oracle, Walmart or Microsoft. So what those people end up being is an employee in a relationship that is beneficial to them relative to their non-billionaire status. Everyone's desire to be a billionaire without having to work for it is what fuels this desire to legislate wealth away from the employers into the hands of the employee.




1. I again and again ..snip..


Of course not. If you were to purge them from society you wouldn't have their jobs to employ laborers while the rest lobby the government to redistribute their wealth away. With the argument of redistributing their wealth upon governmental force, you are taking steps to purge the entrepreneur from society and you don't even realize it. Again, you don't understand your own argument.



2. The evaluation of profits ..snip..


It doesn't matter how one might interpret the morality of self-interest and profit motivation. It doesn't matter one bit, because self interest is inherent natural law. In his book "The Wealth of Nations" Adam Smith sums up this natural self interest succinctly.

"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self love, and never talk to them of our necessities but of their advantages"
-- Adam Smith, The Wealth of Nations

There isn't any point in arguing the right or wrongness of self interest or profit motivation. It is a thing that occurs in nature, and is therefore naturally just. Arguing otherwise would be the equivalent of arguing the inherent, relativistic morality of nuclear fission or the predator-prey relationship.



You're arguing against ..snip..


Yes, someone here is arguing the position that the wealthy should be punished for being wealthy, and that person is you. You really don't understand your own argument. The statement, "I'm not arguing the position that the wealthy should be forced by government to support the poor, but I really think heavy taxation on the rich to provide health care for the poor is a good idea", is the equivalent of saying, "I don't mean to be rude, but your face looks like it caught fire and was extinguished with a wet rake." The first part of the statements are negated by the effects of the latter parts. You are arguing that profit motivation should be a punishable offense, and therefore it is morally wrong, and prefacing your arguments with the disingenuous statement that you aren't arguing for that very thing is completely insane.



A person on their way ..snip..


Again, ignorance rears it's ugly head. Do you think a tax increase of 7-10% will relate to a profit margin decrease of 7-10%? Is that what you really think is going to happen? No, it's going to relate to a 7-10% increase in consumer prices, or perhaps a 7-10% decrease in wages, perhaps layoffs, or possibly a switch to cheaper materials resulting a net loss in value for the consumer. It could result in any combination of these things, but it won't translate into a profit margin decrease. If legislation is enacted to force this tax increase to come directly from profits through price control, labor freeze laws and other regulations, it could very well cause an entrepreneur, who is already a multimillion or billionaire, to retire. Simply due to the fact that the entrepreneur, at that point in time, isn't at the helm of his own business.




This argument about removing profit motive is absurd because no one is arguing for that, (except perhaps socialists a century ago).


Tell me then, what exactly are you arguing for? Your goal post keeps moving with each passing post, and it's really beginning to look like you don't even know what you are arguing for, so explain it.



Gotta stop you right here..snip..


Already addressed above before you rehashed this same statement. You didn't stop anything. All you did was show a little more ignorance and arrogance on the subject of business and economics.



Which makes him less competitive against his peers, not a good idea


That all depends on who his peers are, and whether or not they are suffering the same tax burden. That is also the reason I offered several options, and I'm sure entrepreneurs could come up with even more ideas to offset the cost of rising taxes to either their employees or customers.



Also, keep in mind there's a ..snip..


How is this "messed up"? The "top exec" didn't choose a tax rate hike, and if that "top exec" devises a strategy to keep the production and profit margin up without the excess labor costs, then firing thousands of employees is the right thing to do for the business. It's not "messed up" at all, it's good business.



Where's that, exactly? ..snip..

Why do you think companies are still headquartered here instead of elsewhere nitwit? You are actively arguing to change that dynamic. When the tax burdens become high enough to make other countries look more favorable, what do you think will happen?




No. This won't happen.

Oh no, this could never happen:

http://www.sltrib.com/news/ci_14697685

http://djcoregon.com/news/2010/01/27/measures-66-67-pass-bldgc/

http://cjonline.com/news/legislature/2010-03-14/tax_increases_on_deck

Research first, speak second.

Lager
04-26-2010, 06:47 PM
Malloc, your economic knowledge is impressive. You also make some very solid arguments. It's a liberal catechism that there are obscene or at least excessive profits being garnered out there, so skimming some of the excess to "help" society will not cause any harm. They ignore a dynamic which tends to set and regulate profits through the free market system. Obscene profits being raked in by health insurance companies was a common leftist sound byte until it was pointed out that the margins of the sector weren't that large when compared to other businesses.

So we can take a few billion for the good of the working class and no one will miss it right? It's a very naive concept. I'm troubled when many people believe the government would efficiently and responsibly divy up the booty. It is just as easy, if not easier for corruption to exist in government as it does in business. When you control money, either because you possess it, or because you decide how it will be doled out, you have power.

Let's take one of Wei Wei's ideas of government offering tax credits or breaks to businesses to encourage domestic hiring. Congress can make all kinds of conditions on who and how much is given. They can attach regulations to further their social engineering goals, or to further the environmental agenda. They can favor businesses in their states in order to help their reelection prospects. They can reward political interest groups or return favors to big donors. Either way, it is simply not a very efficient or trust worthy method to allocate capital in a free society.

malloc
04-26-2010, 09:04 PM
I'm going to stop quoting you fully because the replies are too long.

If the dime people wanted better education to increase wages or better coverage to increase their health, and were willing to part with a portion of their dime in exchange for these things, that would create a market demand which would be served without the government's imposition. The fact is, these dime people are more than happy to have better wages, and better health care by making someone else part with enough dime portions to support their betterment, but they won't sacrifice any of their own wealth. In the private sector, these training institutions and health care providers grow business, increase employment and create wealth. In the public sector, these training institutions and public health care insurance systems raise taxes or deficits or both, and consume wealth.

I know, you think that since the government is confiscating wealth to further the education of workers, that this wealth isn't consumed, it's used to produce a product which is a better trained labor force right? Well, you would be wrong. A government program leveled at creating a better skilled laborer would create a surplus of labor in some markets and a shortage in others. Why? Well, government doesn't have a crystal ball! I don't know if you noticed this, but D.C. bureaucrats are very, very bad at reading price signals or wage signals and divining where an individual's training should lie. We don't even have to get into microeconomics and localities to see why this is a very bad idea. So in reality, the "product" produced in public hands will always be less efficient than the resources required to produce it, and that is a consumption of wealth.

So the liberal, big government solution is to take from the wealthy and put that money into private hands for education, such as grants. However, that causes a completely different kind of market distortion. The money to go to college is then "free", from the student's point of view, so there is no opportunity cost involved with purchasing tuition. That is why modern college tuitions are disproportionately high compared to rise in costs of other fields, like trade schools. The colleges are only charging the most the market will bear, but a market subsidized with a steady stream of tax payer funded subsidies can bear an awful lot.

So let's say one of the dime people gets his education and is now earning two dimes. He has two offspring who try to go to college, but do not qualify for a portion of Mr. $100's income because daddy earns 2 dimes instead of one. Because of the infusement of subsidy fueled demand funneled into that market, prices have risen to where Mr 2-dime's offspring cannot go to college. Thus this system has just created two more dime people by saving one.

A better system would be a free market approach, where colleges, would have to drop the price of their tuition down to the levels where the dime people can offord it, otherwise an educational enterprise would have only Mr $100's offspring to educate, and that won't sustain the enterprise.



If small business are boosted (via tax cuts and government credits for "good hiring and employing practices") as the expense of 10% of a billionaires income, then that would increase small business employment, who should also have lower tax rates to increase their growth, which would increase competition, and allow our capitalist system to work better overall.


Many small businesses are interconnected with large business. We've already established that higher taxes can lead to higher prices. It takes a lot more than tax cuts and credits to "boost" small business. Under this model my small specialty ammunition company would suffer because the costs of Remington primers, brass and high-end bullets would rise because these big businesses must make up for profits lost to taxes. Government involvement, except to enforce contracts or prosecute force or fraud almost never helps a capitalistic system.



which costs Americans jobs but fattens the wallets


That tells you that corporations are evil. It tells me that American workers are currently not competitive. The fault may not lie within the workers itself, but there definitely is a profit-driven reason to outsource labor.



Tax cuts, and other incentives...


No, the long-term solution is to allow the American worker to become competitive again. In order to this the government is going to have to quit propping up Wall Street, the UAW and investment companies, and let a deflationary cycle take place. Then American labor will cost less, but American wages will sustain a similar quality of life. Liberal thinkers tend to see a problem and think, "I know, we just need the government to.....", well then they end up with two problems. Oftentimes in economics, "leave it alone" is the best policy. That's why liberals who actually learn real economics become libertarians.








Bailing out leading corporations, without regulations on how to use the money, which they then used to pay their top executives millions in bonuses is hardly a Keynsian policy.
.....
I haven't read the Fatal Conceit but could you give me a run-down of his/her logic in supporting these arguments?


You are right that Keynes himself wouldn't have stood behind this, but Keynsian economics has taken a mind of it's own as it evolved, and politicians use economists who interpret the 'G' portion of the gross domestic product equation to mean "government spending on anything, including deficit spending equals a higher GDP". That is reality of modern Keynsian economics.

This is wrong because governments don't know where to put the capital, and they never forsee the market consequences of their actions. Price signals are the free market solution to rationally distribute resources over an economy and solve the economic calculation problem. Government controlled production does not have this mechanism. Price signals convey the availability of a resource, as well as the desirability of that resource. Distributing wealth in an effort to boost demand, would only boost demand in certain sectors of the economy, which wouldn't necessarily be the most efficient use of the resources consumed in that sector. For instance, government subsidies of cars in the cash for clunkers program boosted demand in the new automobile sector. This caused capital intermediate goods, such as steel, tires and glass to be funneled into automotive production because price signals in the auto industry were favorable. However, this may have priced out other sectors of the economy that could have found a more efficient use for them.

The best way I can explain the government spending fallacy is an analogy I've used several times before. The government decides to start a public works project to help combat unemployment, so they decide to tear down a bridge and rebuild it, rather than to repair it. The public can see the workers working on this bridge, so on the surface it seems to help. They can see the bridge being built so they see usable infrastructure, so on the surface that seems to help as well. What they can't see are the cars, microwaves and other products which were not created because the resources were consumed building a bridge that didn't need re-building. If the resources were not consumed, their supply would have been elevated, their prices would have dropped, and perhaps the local factory could have expanded it's operations over time and come to permanently employ many more people than the temporary employment offered by the bridge project.

If you want more explanation that that, read the book!



Extremely high unemployment is bad for everyone, but marginal unemployment is a good thing because it allows employers to negotiate far lower wages for their employees.


This may be true on the surface, but it really translates into one sector's labor pool becoming oversupplied. Market forces remedy this situation. The laborers cross train, and move into other sectors where there is a demand for their newly acquired skill, and the laborers who don't cross train benefit from this move as oversupply dries up within their profession.




Assuming they put the money into an American bank, which they don't need to do.


Is there some law against borrowing money from a foreign bank? Is there a law against foreigners borrowing money from an American bank?



In the 50's and 60's the tax rates on the wealthy were extremely high, and there were many programs aimed at lower income people, resulting in the largest increase in the middle class in history.


Now you go back to this argument, and as I've already demonstrated, economic times in the 50's or 60's weren't all smooth sailing. Economically speaking, the expansion of the middle class during this time period happened in spite of the tax rates, not because of them. Correlation does not equal causation. The expansion of the middle class during this time period is a direct result of the strong demand for manufactured products worldwide, and the U.S. being the only source for these goods that wasn't bombed to hell. If you have strong enough external demand, you can overcome burdensome taxes, however the expansion would have been much faster and much greater had the tax rates remained lower. However we had war debt to pay off, so the tax rates had to increase.

malloc
04-26-2010, 09:05 PM
It's not fair to use the blanket term "Government". Some policies work, some fail, some have unintended consequences, some are unpredictable. It's like politiciams who cut funding for medicaid and then later use the failing medicaid system as proof that "government doesn't work".


Every action of government has a reaction within the market. Some policies "work" in the sense that they accomplish their goal, like cash for clunkers. However, they also have consequences like oversupply in the recycling industries and resource shortages in the secondary car market.




Most rights that were written in the constitution did not apply to slaves, again, the rights were set but the level to which they were applied has changed over time.

Everyone agrees that citizens have a right to health care services, the question at hand now is to what degree does that right extend. That is NOT a clear-cut answer that's written in stone, and it's something we are deciding right now. There are many reasons, economic and otherwise to clarify how far this right extends, but I consider it a moral issue as well.

The Constitution did not set our rights! Our rights are inherent, the Constitution merely recognized some of them. The fact that these rights did not apply to slaves, but now there are no slaves, is not an example of new rights being discovered. It is an example of people asserting the rights they already had.

No everyone does not agree that health care is a right. You do not have a right to something you don't inherently posses. You do not have a right to anything in which you must ask another's permission. Everyone agreeing that the sky is purple won't make the sky purple. Everyone agreeing that we should all be billionaires won't make us wealthy. Everyone agreeing that health care is a right, will not provide health care for all. As a matter of fact, if this "everyone agrees" were true, and should we take steps in that direction, we won't have a health care industry left to provide us with this supposed "right".

malloc
04-26-2010, 09:34 PM
Malloc, your economic knowledge is impressive. You also make some very solid arguments.


Thank you. I've been studying economics as a hobby for quite a few years now. Most people call it "the boring science", and really don't get much past the laws of supply and demand. I find the study of economics to be fascinating though.



It's a liberal catechism that there are obscene or at least excessive profits being garnered out there, so skimming some of the excess to "help" society will not cause any harm. They ignore a dynamic which tends to set and regulate profits through the free market system. Obscene profits being raked in by health insurance companies was a common leftist sound byte until it was pointed out that the margins of the sector weren't that large when compared to other businesses.

So we can take a few billion for the good of the working class and no one will miss it right? It's a very naive concept. I'm troubled when many people believe the government would efficiently and responsibly divy up the booty. It is just as easy, if not easier for corruption to exist in government as it does in business. When you control money, either because you possess it, or because you decide how it will be doled out, you have power.


This is very true. Liberals, socialists, and others who advocate for a centrally planned economy really don't understand economics at all. Because of this ignorance, they think it benevolent when the economic planners prop up an industry, provide welfare for the poor at the expense of the rich, etc. They just don't understand the havoc this can cause. Liberals see wealth as some big pie which should be divvied up equally. What they don't see is the mechanism that goes into building that pie and making it bigger, and how much divvying it up equally will ensure the absolute destruction of that pie.

These socialists come up with some brain dead idea of how a government can plan an economy and make wealth equal, and have the unicorns dance on the rainbows or whatever. Then you ask them what mechanism such a government would employ to solve the economic calculation problem and you get a deer in the head lights look.

My favorite quote on the subject:

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." -- F.A. Hayek




Let's take one of Wei Wei's ideas of government offering tax credits or breaks to businesses to encourage domestic hiring. Congress can make all kinds of conditions on who and how much is given. They can attach regulations to further their social engineering goals, or to further the environmental agenda. They can favor businesses in their states in order to help their reelection prospects. They can reward political interest groups or return favors to big donors. Either way, it is simply not a very efficient or trust worthy method to allocate capital in a free society.

This is very true, and this diversion of wealth, the inefficiency, corruption, fraud and loss still does not solve the problem. The problem isn't that business are out sourcing. The problem is that American labor in that area is not competitive. So after all is said and done Congress creates a big, wasteful program aimed at solving the wrong problem.