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2011 Jobs Bill

Sep 9, 2011#1

Necronic

Dunno how many people watched/listened to this last night. I caught most of it on my drive home.

There were a couple of really good lines in there that should have some universal appeal to the voters:

"....maybe some of you have decided that those differences are so great that we can only resolve them at the ballot box. But know this: The next election is 14 months away. And the people who sent us here -- the people who hired us to work for them -- they don’t have the luxury of waiting 14 months. Some of them are living week to week, paycheck to paycheck, even day to day. They need help, and they need it now."

"Building a world-class transportation system is part of what made us a economic superpower. And now we’re going to sit back and watch China build newer airports and faster railroads? At a time when millions of unemployed construction workers could build them right here in America? "

Then there's the stuff that's going to get the Republican's blood rising:

"I’m also well aware that there are many Republicans who don’t believe we should raise taxes on those who are most fortunate and can best afford it"

Really the mistake there was to use the word "fortunate" because it follows the implication that the rich are rich because they are lucky, which will never sit well with republicans (or myself for that matter).

Then there were some REALLY dumb things said (seriously his speech writer must have downs syndrome):

" It will be paid for. And here’s how.

The agreement we passed in July will cut government spending by about $1 trillion over the next 10 years. It also charges this Congress to come up with an additional $1.5 trillion in savings by Christmas. Tonight, I am asking you to increase that amount so that it covers the full cost of the American Jobs Act"

This is a phenominally stupid thing to have said. Don't worry, it's going to be paid for, because I told someone else to figure it out.....

---------------

Anyways, that stuff aside. Let's talk about the meat.

Total Cost : ~500 bil. Close to the cost of the last stimulus package.
Tax Cuts: ~250bil
Spending: ~250bil

Good to see it split down the middle like that, but these days that's not enough. Consider the deficit reduction package that was like 4 to 1 cutting spending to increasing taxes. And that couldn't pass.

Tax Cuts: I disagree with most of these.

Employee Payroll Taxes (~70 bil) - 50% reduction in employee payroll taxes. Will increase income for lots of americans by some marginal amount. Generally I disagree with this. To stimulate spending from consumers you can't slowly eke up their income like an old man getting into water. It needs to be dramatic (like going from unemployed to employed.)

Moreover, I don't think increasing american incomes does a ton for the economy as a lot of what they buy is imported from other countries

Employer Payrol Tax cut (~30 bil?) - large tax cut in employer payroll taxes. Good idea imho. Companies are more mechanical and logical with their spending than individuals. As opposed to individuals, companies WILL notice the increase in revenue and will adjust spending appropriately.

Numerous tax breaks for hiring - I don't like any of this tbh. This stuff never becomes a deciding factor for hiring, as it amounts to a very small % of the cost of a new hire. Moreover, adding additional exceptions to the tax system goes directly against cleaning up the tax code (another goal)

Cleaning up the tax code - This I love. I don't think it's necessary to increase taxes on ANYONE. However if you simply cleaned up the tax code and removed the byzantine spiderweb of exemptions that exist in it you reduce the costs of paying taxes, you reduce the costs of collecting taxes, and you eliminate stuff like billionaire's paying 17% income tax (changing short term/long term capital gains loopholes.)

Spending - Some of this I liked, some of it I didn't. The main thing I dislike about all of it is that we barely made ANY headway on infrastructure during the stimulus package. Why would this be different?

Infrastructure - Our country DESPERATELY needs a new investment in infrastructure. And, while I think an adrenaline shot to the heart helps in the short run, it doesn't matter if we can't figure out a way to maintain it for the long run.

Teachers - Yeah we need to hire them back and improve spending on public education.

Then there was other stuff

Unions - I will never agree with Obama about Unions. He's from Chicago, I'm from Texas, what do you want. Screw unions. All of them.

Regulations - I liked his statement on removing unnecessary ones but understanding some are necessary. That said it's still a massive argument about what's necessary and what's not. I'm generally pro regulation, but at the same time a lot of it is idiotic.

----------------

Anyways, overall it just looks like a speech, I doubt anything will come of it. The only thing that perked my ears up was the tax reform, but I've heard it all before.

What did you guys think?

Sep 9, 2011#2

Dave

Tax the fucking rich the way they should (and used to be) and close the tax loopholes for corporations. BAM! Deficit gone.

Sep 9, 2011#3

GasBandit

I like how he said "pass this bill now" but he's still waiting for legislators to finish writing the bill for him, since he didn't actually have a bill, just talking points.

I also "like" how we just had a great big national crisis where we resolved, finally, to cut spending by 7 billion dollars next year so we can raise the debt ceiling, and now we don't even bat an eyelash at dropping another half trillion.

It just tastes like more of the same to me, albeit sprinkled with some chocolate chips. But a chocolate chip shit sandwich is still eating shit.

Sep 9, 2011#4

Necronic

Dave said:
Tax the fucking rich the way they should (and used to be)

By "used to be" do you mean during the Carter years?

Sep 9, 2011#5

Dave

Hard to read so I apologize. But the level of the Carter administration would be great.

Sep 9, 2011#6

@Li3n

Necronic said:
Unions - I will never agree with Obama about Unions. He's from Chicago, I'm from Texas, what do you want. Screw unions. All of them.

Yeah, i mean fuck lunch breaks, non-hazardous work environments and not working 24/7... China has it right...

Sep 9, 2011#7

GasBandit

@Li3n said:
Yeah, i mean fuck lunch breaks, non-hazardous work environments and not working 24/7... China has it right...

Certainly we non-union states don't have any of that. Because those things only exist where unions are there to make everything cost twice as much to produce.

Sep 9, 2011#8

MindDetective

Necronic said:
Cleaning up the tax code - This I love. I don't think it's necessary to increase taxes on ANYONE. However if you simply cleaned up the tax code and removed the byzantine spiderweb of exemptions that exist in it you reduce the costs of paying taxes, you reduce the costs of collecting taxes, and you eliminate stuff like billionaire's paying 17% income tax (changing short term/long term capital gains loopholes.)

I'd love it, but the reason those loopholes are there are because of the lobbyists. The reason they are going to stay there is because of the lobbyists. In all honesty, what I think we really need is to give special interests their own voice in government and ban them from influencing the voice of the people and the voice of the states (ha, those poor states) they way they do.

Sep 9, 2011#9

Chibibar

@Li3n said:
Yeah, i mean fuck lunch breaks, non-hazardous work environments and not working 24/7... China has it right...

You do realize that are two separate issue right? (it was related back in the days, but general safety is built in to our system now)

Sep 9, 2011#10

Krisken

Texas is tied with Mississippi for the most minimum wage workers and they have the most uninsured workers. Great place, that.

Sep 9, 2011#11

@Li3n

GasBandit said:
Certainly we non-union states don't have any of that. Because those things only exist where unions are there to make everything cost twice as much to produce.

Well it's a good thing your state did all those reforms in a vacuum without any influence from the actions of the union movement at the start of the 20th century...

Also, i hear that in some cases the free market can lead to monopolies... we should totally get rid of it, because it's not like you can just try to avoid the conditions in which it does that... i mean i for one totally get rid of my car when it has a flat tire...
Added at: 21:12

Chibibar said:
You do realize that are two separate issue right? (it was related back in the days, but general safety is built in to our system now)

And of course that means it now can't be taken away...

Sep 9, 2011#12

Chibibar

http://www.politicususa.com/en/churches-taxes

Started out ok, but kinda went nuts (the gist of the message is interesting to look at)

@Li3n: I am not understanding what you are trying to say?

It is built in worker's right. There are minimum wages, FDA approval, FCC, and all kinds of acronym system that REQUIRE to make safe products, safe place to work and part of law. To take these away, is to change the our government entities. It would be interesting to see trying to take FDA away in enforcing safe work place for workers, and food/drugs production. Can it be taken away? sure, if the general public allow it but that doesn't mean we need unions.

There are Labor LAWS that requires minimum safety standard in a work place. to take that away will require the act of congress.

Sep 9, 2011#13

Necronic

Unions were able to accomplish a lot of good things back in the day. These days it's much harder to find the good amongst all the bad.

Texas is tied with Mississippi for the most minimum wage workers and they have the most uninsured workers. Great place, that.

I won't disagree that Texas has it's problems. It definitely does. But I'm not convinced that the comment about minimum wage is nearly as telling as per capita GDP.

We rank 29th in in state per capita GDP, which is ok, not terrible, not great. I mean hey, California comes in at 12. That is of course until you factor in cost of living where we are amongst the lowest. This means that a cost of living adjusted per capita GDP ranking puts us in the uper 25% or so, and (humurously) puts California down to 49th

And yeah, the state of insurance in texas is terrible. I won't disagree. At all.

Sep 9, 2011#14

@Li3n

Chibibar said:
It is built in worker's right. There are minimum wages, FDA approval, FCC, and all kinds of acronym system that REQUIRE to make safe products, safe place to work and part of law. To take these away, is to change the our government entities. It would be interesting to see trying to take FDA away in enforcing safe work place for workers, and food/drugs production. Can it be taken away? sure, if the general public allow it but that doesn't mean we need unions.

There are Labor LAWS that requires minimum safety standard in a work place. to take that away will require the act of congress.

And how would the general public go about if they wanted to stop measures that would take away those rights.. i'm guessing by organizing in some fashion...

Sep 9, 2011#15

Chibibar

@Li3n said:
And how would the general public go about if they wanted to stop measures that would take away those rights.. i'm guessing by organizing in some fashion...

Lobbyist!

(back to old school baby!)

Edit: In all seriousness, union did have its place. It was the unions that establish what we have today (no denying that) but after reading the CURRENT way of union operates, I think it hinders the economy than doing good back in the days.

Sep 9, 2011#16

Necronic

I work at a company that has the strongest internal regulations I have ever seen for safety and whatnot. WELL beyond what is required by law.

They don't do it because it's required by law. They do it because it saves money. Preventing accidents saves a lot of money in lawsuits and the like. It also allows for smoother operation, which allows for better financial planning.

Not everyone does this, even when required by law or by unions, and its interesting that (in my industry at least) the ones that take shortcuts or just pay lip service to the legal requirements end up having accidents that cost their company massive amounts of money in litigation or even in just reputation. For instance we use BP and Haliburton as an example in our training classes as what not to do, simply because you don't want to have that reputation.

Edit: To be clear I am REALLY in support of those safety/environmental regulations btw. I'm just saying that the current litigiousness of our society makes companies a lot less keen to operate like they did 'In the good old days'. Plus you don't need to do that to make a profit. It WOULD help if you could fire incompetent workers though.

Sep 9, 2011#17

Chibibar

Necronic said:
I work at a company that has the strongest internal regulations I have ever seen for safety and whatnot. WELL beyond what is required by law.

They don't do it because it's required by law. They do it because it saves money. Preventing accidents saves a lot of money in lawsuits and the like. It also allows for smoother operation, which allows for better financial planning.

Not everyone does this, even when required by law or by unions, and its interesting that (in my industry at least) the ones that take shortcuts or just pay lip service to the legal requirements end up having accidents that cost their company massive amounts of money in litigation or even in just reputation. For instance we use BP and Haliburton as an example in our training classes as what not to do, simply because you don't want to have that reputation.

I have always wonder this. I know that starter company tend to take "short cuts" because some regulation cost a LOT more money than they actually have and won't even start off the ground in their business (whatever it may be)

but when I see big corps take shortcut to "save a buck" it is scary

Sep 9, 2011#18

Krisken

Chibibar said:
Lobbyist! (back to old school baby!)

Edit: In all seriousness, union did have its place. It was the unions that establish what we have today (no denying that) but after reading the CURRENT way of union operates, I think it hinders the economy than doing good back in the days.

See, that's the thing. You're talking about throwing out the baby with the bath water. It always baffles me that everyone says "unions have bad elements, so get rid of them completely". How about reforming how unions work? Get rid of the corrupt elements and require better management.

Sep 9, 2011#19

Chibibar

Krisken said:
See, that's the thing. You're talking about throwing out the baby with the bath water. It always baffles me that everyone says "unions have bad elements, so get rid of them completely". How about reforming how unions work? Get rid of the corrupt elements and require better management.

I am all for union reform, but in current state? it would be litigation for the ages! So I figure scrap the whole thing and set up new rules on how to form them

Sep 9, 2011#20

@Li3n

Necronic said:
They don't do it because it's required by law.

Preventing accidents saves a lot of money in lawsuits

I'll let you figure it out...

Sep 9, 2011#21

GasBandit

@Li3n said:
Well it's a good thing your state did all those reforms in a vacuum without any influence from the actions of the union movement at the start of the 20th century...

So what you're saying is we should keep institutions in perpetuity, long after they not only have ceased to provide a benefit but have actually become malignant?

Sep 9, 2011#22

@Li3n

GasBandit said:
So what you're saying is we should keep institutions in perpetuity, long after they not only have ceased to provide a benefit but have actually become malignant?

No, you should totally get rid of your government... just look how well that went for Somalia...

Unless said institution where created for nothing you should either fix them or replace them with something better...

Sep 9, 2011#23

Chibibar

Necronic said:
Edit: To be clear I am REALLY in support of those safety/environmental regulations btw. I'm just saying that the current litigiousness of our society makes companies a lot less keen to operate like they did 'In the good old days'. Plus you don't need to do that to make a profit. It WOULD help if you could fire incompetent workers though.

You know, I wonder that. I mean why even keep them in place if they are of no value?

Sep 9, 2011#24

GasBandit

@Li3n said:
No, you should totally get rid of your government... just look how well that went for Somalia...

Unless said institution where created for nothing you should either fix them or replace them with something better...

The unions are not the government, and people would continue to work in safety without them.. because 90%+ of us already do.

Sep 9, 2011#25

Necronic

@Li3n said:
I'll let you figure it out...

There's a real difference there. You can follow the law to the letter and still get someone killed and be sued for criminal negligence.

Sep 9, 2011#26

Covar

@Li3n said:
No, you should totally get rid of your government... just look how well that went for Somalia...

Unless said institution where created for nothing you should either fix them or replace them with something better...

Worked well for us the first two times we did it.

Sep 10, 2011#27

Zappit

Unions aren't always at fault - companies don't produce goods people want - except Apple, it seems. Detroit had very generously-paid union workers in the auto industry, and that worked fine until the corporate end cut costs and allowed the Japanese to produce better vehicles and innovate more. Wasn't a problem until then. People suddenly didn't want massive gas-guzzlers when gas prices leveled out at four bucks a gallon and stayed that way for years, yet the decision of the auto producers was to keep manufacturing them. Even companies outsourcing still do everything at the lowest possible cost, regardless of quality. You want success - create something worth that success.

Sep 19, 2011#28

@Li3n

GasBandit said:
The unions are not the government, and people would continue to work in safety without them.. because 90%+ of us already do.

And without threat of consequences none of the people who aren't looting would loot either... i mean they're not looting now, are they?

Sep 19, 2011#29

GasBandit

@Li3n said:
And without threat of consequences none of the people who aren't looting would loot either... i mean they're not looting now, are they?

So let me get this straight... you think that the harsher unions muscle companies... the better that workers in right-to-work states will have it?

Remember how the $16 an hour right to work states just got done having to bail out the $40 an hour union states?

Sep 19, 2011#30

strawman

Zappit said:
Unions aren't always at fault - companies don't produce goods people want - except Apple, it seems. Detroit had very generously-paid union workers in the auto industry, and that worked fine until the corporate end cut costs and allowed the Japanese to produce better vehicles and innovate more. Wasn't a problem until then. People suddenly didn't want massive gas-guzzlers when gas prices leveled out at four bucks a gallon and stayed that way for years, yet the decision of the auto producers was to keep manufacturing them. Even companies outsourcing still do everything at the lowest possible cost, regardless of quality. You want success - create something worth that success.

What is this I don't even

You are mixing up several key inflection points in the auto industry, and then tying them into the idea that unions had no impact on any of those inflection points?

Your overall point about the auto companies producing something people don't want is absurd, but there's nothing of substance within your post to rebut, so... meh.

At best your post is confusing.

Sep 19, 2011#31

D

Dubyamn

stienman said:
What is this I don't even

You are mixing up several key inflection points in the auto industry, and then tying them into the idea that unions had no impact on any of those inflection points?

Your overall point about the auto companies producing something people don't want is absurd, but there's nothing of substance within your post to rebut, so... meh.

At best your post is confusing.

It was but I think that the main point was that it was the poor car design and quality that lead to the implosion of GM and the big problems with the American Auto industry not their generous union gifts. The corporate obligations only became a problem after sales took the massive gut punch of very expensive gas taking the heart out of the SUV sales which was the one category that Detroit was actually beating Japan in.

Where as if Detroit had innovated, produced better quality smaller cars instead of letting their designs languish and rot in order to focus on SUVs they might have been able to meet their union obligations.

Sep 19, 2011#32

Zappit

Bingo. It's not that I'm oversimplifying - it's that the auto industry in the US held to gas-guzzler trends when the rest of the world saw to go with more fuel-efficient vehicles. Yet, the UAW union gets all the blame and bad press for the foolishness of the corporate end.

Sep 19, 2011#33

strawman

Huh. I have a very different view of the downfall of the auto industry and the poor union performance. But living the last few decades in the middle of the automotive industry would give me a different perspective - and not necessarily a correct one.

As far as I'm concerned, the UAW are responsible for a whole lot of UAW problems, and the auto industry is responsible for a whole lot of auto industry problems, and the two groups like to blame each other for each other's problems, but the reality is that they each have their issues and they are both stupid in their own way.

However, the unions (as they are being run today, in southeast michigan, in the auto industry) are directly responsible for a lot of unemployment - that I can state with a great deal of certainty. Right now Job #1 of the UAW is to protect the continued existence of the UAW, and they've done many things that hurt the workers and the auto makers in their effort to prevent themselves from becoming naturally obsolete, as unions have done in other industries.

But that's neither here nor there. Barack trying to change the political conversation back to jobs jobs jobs is an attempt to control the political discussion and an important part of his campaign for reelection.

Sep 19, 2011#34

Krisken

Funny, when Republicans were trying to get elected they said "Jobs, jobs, jobs". How did that turn out? Oh, that's right, they didn't do shit to encourage job growth.

Sep 19, 2011#35

strawman

Huh. I thought the replicons were "Improve economy --> people will get jeorbs" whereas duplicrats were "Get people jeorbs --> economy will improve"

Sep 19, 2011#36

AshburnerX

Both approaches have their merits and work in different ways, but ultimately the Democrat plan improves the lives of workers more quickly, which is more attractive for the voting public.

People spend what they have... if they don't have it (or can't get more of it via loans/credit), they can't spend it. This is actually pretty simple. It only becomes complicated when you look at the business side of it, which is mainly complicated because of various boneheaded legal rulings we've had over the last hundred years.

Sep 20, 2011#37

Mathias

If a person making 34k a year pays 11% in taxes (about 4k) that money has more impact to that person's budget than 110k expected to pay at 11% from a person making a million a year. I'm pretty sure the super rich can get by without having to buy a new Mercedes. I love the cock and bull house republicans are spouting about "job makers" being under pressure if they're taxed. Folks, they've had the lowest tax rates since the 50's, and we're in an economic slump with no jobs being created. The money doesn't trickle down.

Sep 20, 2011#38

GasBandit

I object to the whole "pay their fair share" rhetoric being tossed around. When the top 5% of earners are paying more than 50% of the tax revenue, how are they not paying "their fair share?"

As for jobs going overseas, you don't think that might have something to do with the reign of an administration extremely hostile to business causing gobs and gobs of that which wall street hates most: uncertainty? Much as I hate to say it, even straight tax breaks aren't going to be enough on their own to reinvigorate the job market, and government spending another lump of "more-of-the-same" stimulus money isn't going to do it unless we're going to have new stimulus into perpetuity, otherwise the jobs are only short term. What's needed is a complete rethinking of how we do things, and a drastic reduction of the intrusiveness of government. If it didn't occur to you that maybe things have gone too far when even a little girl can't run a lemonade stand without the proper permits and kickbacks, then I think we need to check Lenin's tomb to see if the body is still there.

The whole Buffett thing is complete bullshit as well. Mr "Raise my taxes" is trying to dodge a billion dollar tax bill. And comparing capital gains tax to income tax isn't exactly an apples-to-apples comparison. The fact of the matter is, if somebody thinks the government should be taxing them more, nothing's stopping them from writing a bigger check. But so far they aren't putting their money where their mouth is.

Sep 20, 2011#39

strawman

There are no jobs in the US for $2/hour programmers. If we choose to force companies to pay $25/hour for their programmers, then we'd have less innovation - not hire more unemployed programmers. It wouldn't be cost effective to start some businesses.

Globalization is a reality. Blaming the economy on the companies outsourcing jobs, rather than understanding the issue and changing our economy to account for it is a fool's errand.

The huge taxes and import fees we placed on foreign automakers to try to prevent cars from being imported only made cars more expensive. Now all the foreign car makers are making their cars in the US. So forcing "fairness" on the autoindustry didn't make US cars cheaper, it made foreign cars more expensive, and now we all bear that burden. Further it didn't save the auto industry - it still collapsed and reformed itself, then collapsed again recently and reformed itself. The fun thing is that if we had merely let the situation be, we'd have cheaper cars now, and people would have chosen professions that didn't involve standing on an anti-fatigue mat screwing screws into sheet metal for $50/hour (including benefits). But that's what they know, and do, and we're paying through the nose so we can feel all warm and fuzzy about keeping these jobs on our soil.

Jobs we shouldn't need or want.

Sep 20, 2011#40

GasBandit

Do the rich avoid taxes?

Sep 21, 2011#41

Necronic

At least this sets the stage for the next Call of Duty

Sep 21, 2011#42

PatrThom

GasBandit said:
Do the rich avoid taxes?

I would like to see an additional graph illustrating disposable income as a percentage of pretax income. The poorer you are, the the larger the percentage of your income which must go towards essentials.

And before anyone dismisses this as totally unfair, remember that the richer folks are probably going to have higher mortgage payments, higher car payments, and even higher medical bills. After all this, I would still be willing to bet that their percentage of disposable income will be noticeably higher.

--Patrick

Sep 22, 2011#43

Adammon

The economic argument made against taxing the rich at higher rates is it impedes them from hiring people. So my Jobs Bill includes tax breaks for the rich who hire Americans - a graduated scale starting at a relatively high rate, and decreasing as the number of employees gets higher.

"Wouldn't that just create a lot of minimum wage jobs per rich person?" you ask.

Not necessarily. Because the tax rate is tied to your employed numbers, you have to find a way to maintain your workforce and that means better salaries and better benefits in order to hang on to your employees. Jobs are created, taxes are siphoned, rich people get tax breaks.

Sep 22, 2011#44

Mathias

PatrThom said:
I would like to see an additional graph illustrating disposable income as a percentage of pretax income. The poorer you are, the the larger the percentage of your income which must go towards essentials.

And before anyone dismisses this as totally unfair, remember that the richer folks are probably going to have higher mortgage payments, higher car payments, and even higher medical bills. After all this, I would still be willing to bet that their percentage of disposable income will be noticeably higher.

--Patrick

Yes.

Sep 22, 2011#45

Chibibar

I wonder tho. What would happen if the economy is truly capitalism. The government only intervene on monopoly. Is it even possible?

Sep 22, 2011#46

Mathias

Adammon said:
The economic argument made against taxing the rich at higher rates is it impedes them from hiring people. So my Jobs Bill includes tax breaks for the rich who hire Americans - a graduated scale starting at a relatively high rate, and decreasing as the number of employees gets higher.

"Wouldn't that just create a lot of minimum wage jobs per rich person?" you ask.

Not necessarily. Because the tax rate is tied to your employed numbers, you have to find a way to maintain your workforce and that means better salaries and better benefits in order to hang on to your employees. Jobs are created, taxes are siphoned, rich people get tax breaks.

Ha! You mean actually monitor that the "wealth trickles down" like it's supposed to? The far right would have a field day with all that crazy government regulation of the precious and supposed free market.

But yeah, anyone making the "rich people make jobs" ideal can blow it out their ass. We had a solid 8 years of Bush'o'nomics doing that. I don't see no stinkin' jobs.

Sep 22, 2011#47

GasBandit

Please to note: The Bush administration bloated the size of the government to proportions previously unseen and unimagined... until the Obama administration. You can freely and accurately criticize a great deal of the Bush era's policies, but to hold it up as an example of what happens under a conservative fiscal policy is intellectually dishonest.

In other words, Obama's even more Bush than Bush was, just with a tasty Marxist candy coating to disguise what's underneath.
Added at: 17:19
Furthermore, there will always be rich people, there will always be poor people, there will always be people who die needlessly in the gutter, no matter what kind of policy is enacted. This has always been true for every form of government and every form of economy from mercantilism to socialism to communism to capitalism. Until someone figures out cold fusion and energy-to-matter transfer, there will always be more people than resources. The easiest way for us to bankrupt ourselves into perpetuity is to try to make sure nothing bad ever happens to anyone for any reason.

Sep 22, 2011#48

Mathias

The only thing that really ever pisses me off about all this is the assumption that poor people are poor because they're lazy, and the super rich work super hard for their money, so they deserve tax breaks.

Sep 22, 2011#49

GasBandit

Mathias said:
The only thing that really ever pisses me off about all this is the assumption that poor people are poor because they're lazy, and the super rich work super hard for their money, so they deserve tax breaks.

Not all rich people are hardworking, and not all poor people are lazy. But no matter what you do, you cannot legislate an equal outcome. I think the phrase is, some get rich in capitalism, but everybody gets poor under socialism.

People forget that the american dream isn't about the assumption that normalcy is having a house and a car and a dog - it was that it was the first country where you even had the opportunity to earn those things for yourself. Where you weren't in a caste, a peasant born to peasants who would give birth to peasants and die a peasant. We've gotten away from that, gotten a sense of entitlement and victimhood out of nowhere, believing that it doesn't matter what you earn, it matters what you "deserve."

But even under all that, even for all our flaws and shortcomings and alleged callous disregard for the poor and downtrodden... our definition of poverty still exceeds the definition of "average" in europe.

Sep 22, 2011#50

Necronic

Mathias said:
The only thing that really ever pisses me off about all this is the assumption that poor people are poor because they're lazy, and the super rich work super hard for their money, so they deserve tax breaks.

It's not true for everyone, but.....yeah I will totally say that wealthy people are in general smarter and/or harder working than poor people.

Most of the rich people I know work their asses off. Actually they work hard enough that I decided I was totally ok with being middle class.

Sep 22, 2011#51

AshburnerX

Necronic said:
It's not true for everyone, but.....yeah I will totally say that wealthy people are in general smarter and/or harder working than poor people.

Most of the rich people I know work their asses off. Actually they work hard enough that I decided I was totally ok with being middle class.

See, I've had the opposite experience. Pretty much all the rich people I've met are coasting along in life thanks to their family, put absolutely no effort into anything they do, and are completely unable to do anything on their own. They squander the gifts they have received through the efforts of others and are rewarded for doing so by society. Is it any surprise I'm a lefty?

Sep 22, 2011#52

Mathias

GasBandit said:
Not all rich people are hardworking, and not all poor people are lazy. But no matter what you do, you cannot legislate an equal outcome. I think the phrase is, some get rich in capitalism, but everybody gets poor under socialism.

People forget that the american dream isn't about the assumption that normalcy is having a house and a car and a dog - it was that it was the first country where you even had the opportunity to earn those things for yourself. Where you weren't in a caste, a peasant born to peasants who would give birth to peasants and die a peasant. We've gotten away from that, gotten a sense of entitlement and victimhood out of nowhere, believing that it doesn't matter what you earn, it matters what you "deserve."

But even under all that, even for all our flaws and shortcomings and alleged callous disregard for the poor and downtrodden... our definition of poverty still exceeds the definition of "average" in europe.

Buddy, if you're born to a poor urban family in America, you're pretty much certain to die in that social class even if you do bust your ass. You really buy that pull yourself by the bootstraps bullcrap? Working hard in America doesn't guarantee you shit, nor is there much opportunity to advance. It's all about luck here. Just like every other system out there.

As for the sense of entitlement and victimhood, you can blame that all on Capitalism and advertising. That's like the crux behind the driving force of how Capitalism works - the artificially placed desire for material wealth. That's how our society rates success.

Do you know anyone in Europe? Ever been there? Average in Europe (France, England, Germany, Finland, Denmark, etc...) far exceeds average in America, in terms of quality of life.

Sep 22, 2011#53

strawman

Mathias said:
It's all about luck here.

You are a smart person, do I really need to go through the whole, "Do you really believe that effort makes no difference?" argument?

I'd agree that "luck" does play a part, especially in terms of into what situation a given person is born.

I disagree that it's even mostly about luck, nevermind "all".

Unfortunately many people believe exactly that, and expend no effort, fully believing that they will get whatever they're going to get regardless of the effort they put forth - I'd hate to find that this is your belief as well.

In fact, there's a recent baww thread wherein the op holds something akin to this viewpoint.

Sep 22, 2011#54

Mathias

stienman said:
You are a smart person, do I really need to go through the whole, "Do you really believe that effort makes no difference?" argument?

I'd agree that "luck" does play a part, especially in terms of into what situation a given person is born.

I disagree that it's even mostly about luck, nevermind "all".

Unfortunately many people believe exactly that, and expend no effort, fully believing that they will get whatever they're going to get regardless of the effort they put forth - I'd hate to find that this is your belief as well.

In fact, there's a recent baww thread wherein the op holds something akin to this viewpoint.

You're right, it's not all about luck. I retract that statement. It's about having the money and legacy to get accepted to an Ivy. Have the parents with the money and clout for paying tuition, meeting other folks in your same social caste, and graduating from Harvard. It's then about networking with those peers and their high powered positioned parents to give you an edge at getting a top tier business associate, or law position by getting direct emails from the CEO of the company to set up and interview where you can name drop and basically get the job. It's then all about making the million dollar salary to get your kids into Harvard and start the cycle over again.

You might have to work hard to keep your high end job, but don't tell me that's not the cycle most of the power-house business management people follow to get to where they are. A person coming from a low income family faces almost insurmountable odds to achieve that sort of status. It's doable, and they have to work hard, but the truth is that it's a rarity.

My point is that the American dream perpetuates that with a lot of hard work you can do anything and be anyone (and if you can't then you're not working hard enough); I'm saying that's bullshit. There is a reality to face that sometimes no matter how hard you work at something, you will fail at attaining that goal. Luck is the factor that separates those that have succeeded where others have failed. The success stories are the ones you hear about; not the failures. Unfortunately, the success stories are like lottery success stories.

Sep 22, 2011#55

strawman

Mathias said:
You're right, it's not all about luck. I retract that statement. It's about having the money and legacy to get accepted to an Ivy.

Hrm. My best guess is that what you're essentially saying is, "You can't get into the upperclass with just effort." There are countless examples otherwise, but perhaps most of them can be chalked up to luck rather than perserverence and effort.

I'm talking about middle class - and middle class americans are very wealthy by global standards. It's not hard to become middle class through effort and perserverence, and even if you don't quite make it you can ensure that your children do if you provide them with the desire for continual self-improvement.

But I haven't looked at the upperclass much - is it really the case that 99% of the ivy league school students come from well-placed, wealthy families? Are all of the current millionaires second generation upper-class, or had an unusual amount of luck?

Meanwhile, even if I'm wrong, I'm still going to teach my kids that if that's the life they want, they can get it through hard work, and that while they should take advantage of spurious opportunities, they should not depend on, or wait for, luck.

A man's reach should exceed his grasp... (Robert Browning)

Also, a poem my parents made me memorize:

The heights by great men reached and kept
were not attained by sudden flight
but they, while their companions slept,
were toiling upward through the night.
(Henry Wadsworth Longfellow)

Maybe I'm just a pollyanna personality, but this perspective has served me well.

Sep 22, 2011#56

Mathias

stienman said:
Hrm. My best guess is that what you're essentially saying is, "You can't get into the upperclass with just effort." There are countless examples otherwise, but perhaps most of them can be chalked up to luck rather than perserverence and effort.

I'm talking about middle class - and middle class americans are very wealthy by global standards. It's not hard to become middle class through effort and perserverence, and even if you don't quite make it you can ensure that your children do if you provide them with the desire for continual self-improvement.

But I haven't looked at the upperclass much - is it really the case that 99% of the ivy league school students come from well-placed, wealthy families? Are all of the current millionaires second generation upper-class, or had an unusual amount of luck?

Meanwhile, even if I'm wrong, I'm still going to teach my kids that if that's the life they want, they can get it through hard work, and that while they should take advantage of spurious opportunities, they should not depend on, or wait for, luck.

A man's reach should exceed his grasp... (Robert Browning)

Also, a poem my parents made me memorize:

The heights by great men reached and kept
were not attained by sudden flight
but they, while their companions slept,
were toiling upward through the night.
(Henry Wadsworth Longfellow)

Maybe I'm just a pollyanna personality, but this perspective has served me well.

I'm talking about rich, not upper middle class.

Sep 23, 2011#57

Necronic

Going to Harvard for an undergrad simply identifies you as an idiot.

My point is that the American dream perpetuates that with a lot of hard work you can do anything and be anyone (and if you can't then you're not working hard enough); I'm saying that's bullshit

----------

Look. My girlfriend came from a lower middle class broken home where both parents had no college education. She graduated highschool from one of those "troubled girls" high schools. She then went on to her local community college. 2 years in she moved up to the local university. She is now in the first year of her PhD and is already published in one of the most prestigious Autism journals in the country.

Now, this doesn't mean she is rich (actually since she's a PhD student she is crazy assed poor). But it does mean she completely changed her class. And she did it by busting her ass.

----

Then there's my father. He loved planes since he was a kid, he always knew that was what he wanted. He got his degree in engineering and started working for McD or Bell (can't remember). Over the years he managed to get his masters and then his PhD while working with 3 kids and (in the case of the PhD) in a foreign country. Oh yeah and he has a learning disability.

But he was able to overcome that through VERY hard work.

-------

That's one thing I talked about with my dad recently. It's that intelligence helps success, but isn't a necessity and doesn't guarantee it. The only thing that is a complete necessity for success in life is a work ethic.

Sep 23, 2011#58

Chibibar

I am going by what my parents told me. Work smarter not harder.

Now in terms of effort it could mean physically or intellectually. Either way, a person could rise "above their station" when they see an opportunity and run with it (legally

robbing banks is not an example)

Sep 23, 2011#59

GasBandit

Living in PA all this time, I can see why Matthias might think it's all futile and the american dream is dead/bs, but the truth is opportunity is out there, even during the current recession (it's just a great deal harder to come by, especially since we've apparently collectively decided none of us is allowed to own stuff that someone else doesn't anymore).

We all have personal stories and anecdotal evidence that speaks to the upward income mobility of americans. It's also easy to google up studies that show the evidence of income mobility. But I don't think we'll change his mind because this smacks of something deeply ingrained, possibly personal.

Sep 23, 2011#60

Chibibar

GasBandit said:
Living in PA all this time, I can see why Matthias might think it's all futile and the american dream is dead/bs, but the truth is opportunity is out there, even during the current recession (it's just a great deal harder to come by, especially since we've apparently collectively decided none of us is allowed to own stuff that someone else doesn't anymore).

We all have personal stories and anecdotal evidence that speaks to the upward income mobility of americans. It's also easy to google up studies that show the evidence of income mobility. But I don't think we'll change his mind because this smacks of something deeply ingrained, possibly personal.

Heh. Matthias does have some point in terms of
what if I can't move away from where I am now? This does limit your choice of income mobility (I like that phrase) Depending where you are, some jobs/opportunities is just no available. the question becomes why can't you move out of there?
Family? girlfriend/boyfriend? spouse? house? afraid? - some of the factor could hinder you in your chances in advancement

Most humans are creature of comfort and patterns. People hate changes (generally) so doing something different or out of the pattern would be "bad" to that person (mentally)

You don't have to have IVY league college degree. You can get a degree anywhere, but what is important is networking. 20 years ago, I can see this to be VERY difficult. today? not so much.
The age of internet break down any distant barriers.

there are some success stories with ebay stores. A guy open a store with a credit card and selling stuff. He network and now making tons of money via his online store. There was another person made a lot of money via selling 99cent novels on kinda via ebook.

There are TONS of resources out there, but the trick is up to YOU to find it (or with luck find someone who can help you find it)

Sep 23, 2011#61

Chad Sexington

Chibi, I would like to ban you from using the

smiley.

You use it too often and at inopportune places.

You may now return to your regularly scheduled thread.

Sep 23, 2011#62

Chibibar

Chad Sexington said:
Chibi, I would like to ban you from using the smiley.

You use it too often and at inopportune places.

You may now return to your regularly scheduled thread.

LOL. that smiley location on my last thread was intentional. It is my way of saying that some relationship may hinder your personal advancement. I know some "friends" who rarely let their spouse do anything out of the ordinary or risky and yet complain of being "poor" all the time.

Another example would be generation business. My great grandfather did it, my grandfather did it, my father did it, now I have to do it. Some people are so use to being in a certain form, that it is hard for them to break out and do something different.

Sep 23, 2011#63

GasBandit

My grandfather put 5 kids through college on an air force salary, grandma didn't work. They owned the biggest house I've ever been in that wasn't a historical monument... and my grandpa built it. Maybe you can argue that it's a different world today than it was 50 years ago, but it shows that if it's impossible now, it's only because we've chosen policies that make it so.

Sep 23, 2011#64

MindDetective

Actually, I might argue that as the world becomes more interconnected, social networks play a more important role than they used to. In the wild west days, for example, you had to rely on yourself more for surviving, succeeding in business, and prospering. But knowing people is very important in today's society. I'm not saying that people can't pull themselves up by their bootstraps but that it really is qualitatively different than it used to be.

Sep 23, 2011#65

Chibibar

GasBandit said:
My grandfather put 5 kids through college on an air force salary, grandma didn't work. They owned the biggest house I've ever been in that wasn't a historical monument... and my grandpa built it. Maybe you can argue that it's a different world today than it was 50 years ago, but it shows that if it's impossible now, it's only because we've chosen policies that make it so.

I have to agree. Today it is much harder to build a house on your own. (too many rules and policies and requirement) While some of the policies/laws are good cause they (the government) want people to built a safe home (I am in NO WAY saying your grandfather's house is not safe, it is probably more sturdy than modern home due to materials and such). Companies tend to go with "cookie cutters" and try to cut cost in home building to save money and thus laws are put into place to prevent "shoddy homes" (like the whole Chinese Sheetrock fiasco).

Same thing with business, so many laws are in place for the "greater good" cause many good to be just expensive. The cost has to be covered by someone right? usually the consumer. when a business expand and hire more people, all that cost trickle down to the final price of the product.

Sep 23, 2011#66

GasBandit

You want to know the punch line, too? That house he built? Is in Los Alamos, New Mexico - birthplace of the atomic bomb.

Sep 24, 2011#67

PatrThom

Mathias said:
The only thing that really ever pisses me off about all this is the assumption that poor people are poor because they're lazy, and the super rich work super hard for their money, so they deserve tax breaks.

I think what I see is the general perception that rich people are deliberately holding onto their wealth and only sharing it amongst themselves, and spending time (and money) exerting influence on legislation/regulation so as to ensure the continuance of same ("keeping it all in the family," so to speak). The trouble there is that, unless the rich people population is contracting, they will need to accumulate more and more wealth to make sure the per capita wealth stays the same/increases.

Situations such as the home mortgage crisis stand out as a good example of people with money convincing other people with money to give up that money. The end result is that one group now has more money, and the other has less. That whole "too big to fail" thing really pissed a bunch of people off, one thing is leading to another, and the ones who are failing started to view the successful ones as having set them up (true or otherwise). Necessary or not, they just see that some people got handouts while they were forced to go bankrupt.

What most people are complaining about is the perception of an attitude of "What's mine is mine, and what's yours will be mine once I figure a way to take it from you/convince you to give it to me."

--Patrick

Sep 24, 2011#68

Hailey Knight

Am I the only one who wouldn't want a giant house? You gotta clean the damn thing, you know.

Sep 24, 2011#69

Terrik

Quotemander Prime said:
Am I the only one who wouldn't want a giant house? You gotta clean the damn thing, you know.

Hired help!

Sep 24, 2011#70

strawman

Quotemander Prime said:
Am I the only one who wouldn't want a giant house?

No, I also think, like you, that one should have several giant houses - a single giant house wouldn't nearly be enough.

Sep 24, 2011#71

Chibibar

Quotemander Prime said:
Am I the only one who wouldn't want a giant house? You gotta clean the damn thing, you know.

but the rich provide "jobs" you can hire people to clean your home. (yea that was a cheap shot)

Sep 24, 2011#72

Covar

stienman said:
No, I also think, like you, that one should have several giant houses - a single giant house wouldn't nearly be enough.

Don't forget about penthouses.

Sep 24, 2011#73

Azurephoenix

Quotemander Prime said:
Am I the only one who wouldn't want a giant house? You gotta clean the damn thing, you know.

What do you consider giant? 3000 square feet? 4000? 10000?

Sep 24, 2011#74

Dei

My house has like... 1600 finished square feet and I still can't keep it clean. 2 kids helps there though.

Sep 25, 2011#75

Mathias

GasBandit said:
Living in PA all this time, I can see why Matthias might think it's all futile and the american dream is dead/bs, but the truth is opportunity is out there, even during the current recession (it's just a great deal harder to come by, especially since we've apparently collectively decided none of us is allowed to own stuff that someone else doesn't anymore).

We all have personal stories and anecdotal evidence that speaks to the upward income mobility of americans. It's also easy to google up studies that show the evidence of income mobility. But I don't think we'll change his mind because this smacks of something deeply ingrained, possibly personal.

What? It's nothing personal. I just think that rich people (the top 1%) are obligated to return money back us working slobs? Why? Because they own about 50% of the total wealth of the damn country, that's why. How can you know see how fucked in the head that is? I have nothing against hard-working middle and upper middle class folks, but dude, there is a point where you have to say to yourself, "I'm satisfied with I have, and I can contribute what I don't need to my fellow man." Nobody needs or has the right to the kind of insane wealth that these people have.

Financially, my state is fairing fine, if not better than other states in the country. I don't know what you're reaching for with that one. The American Dream is a farce to keep the working slobs working by the rich.

Sep 25, 2011#76

strawman

Mathias said:
Nobody needs or has the right to the kind of insane wealth that these people have.

I don't understand. Are you saying that we should legislate a cap on people's assets and income? No one can be richer than X dollars, just because, what, it's immorally wrong to be fabulously wealthy? In what ways would I be damaging society if I were a billionaire, in ways that are significant enough that I should be dinged for the damage? Why does "freedom" stop once your definition of "sufficient" is met?

What you're saying just rubs me the wrong way. Why should we limit one's freedom to generate wealth?

The whole, "You have more than you need, so you have to give it to society" is counter to capitalism - are you proposing that the government should legislate something other than capitalism, and if so, what?

Sep 25, 2011#77

Mathias

stienman said:
I don't understand. Are you saying that we should legislate a cap on people's assets and income? No one can be richer than X dollars, just because, what, it's immorally wrong to be fabulously wealthy? In what ways would I be damaging society if I were a billionaire, in ways that are significant enough that I should be dinged for the damage? Why does "freedom" stop once your definition of "sufficient" is met?

What you're saying just rubs me the wrong way. Why should we limit one's freedom to generate wealth?

The whole, "You have more than you need, so you have to give it to society" is counter to capitalism - are you proposing that the government should legislate something other than capitalism, and if so, what?

I'm not proposing answers to anything, I'm just stating what's wrong with the current system.

And no, America is not a capitalist society.

Sep 25, 2011#78

strawman

Oh good, I just want to make sure no one is going to stand in the way of me becoming fabulously wealthy.

Mathias said:
America is not a capitalist society.

It's certainly far from a "pure" capitalist system. I'm not convinced that it's closer to any other economic model than it is to capitalism, and I don't think that moving to another model is going to solve any of the problems being discussed in this thread.

But if you aren't splitting hairs, what is America's economic model, if it isn't capitalism?

Sep 25, 2011#79

Krisken

stienman said:
But if you aren't splitting hairs, what is America's economic model, if it isn't capitalism?

That's the rub, isn't it? As a Republic, our society isn't required to be one type of economic model over another. What should be a strength (a fluid economic model which can change with the times and move toward capitalism or socialism as needed) has shifted further toward a pure capitalism. The demonization of the word socialism and of government in general has led us to the point where people advocate destroying all parts of government instead of excising the corruption on finding a solution.

The wealthy want a capitalist society where their companies can be bailed out if things go bad, and they got it. The rest of us would much rather have a marriage of capitalism and socialism for an economic model. It's why things like social security and medicare are such popular programs.

Sep 25, 2011#80

Covar

Chaz's stance reminds me of every time the Boston Red Sox whine about the lack of a salary cap in Baseball. How much is enough? why exactly what they're at of course.

Sep 25, 2011#81

Krisken

Covar said:
Chaz's stance reminds me of every time the Boston Red Sox whine about the lack of a salary cap in Baseball. How much is enough? why exactly what they're at of course.

Bad example since baseball suffers from a lack of salary cap.

Sep 25, 2011#82

strawman

mr_thehun said:
Or stand in your way to financial ruin.

Darn straight! If When I go down in flames, I will be smug with satisfaction, knowing it was all my doing.

Sep 26, 2011#83

GasBandit

Forbes has more food for thought for the "tax the rich" idea...

In 1997, Congress was considering a cut in the capital gains rate from 28% back down to 20%. The Joint Tax Committee (JTC) estimated that as a result revenues would increase by $7.8 billion from 1997 to 1999, but the tax cut would produce a loss of $28.8 billion over the following 7 years, for a net loss of $21 billion over the 10 year period.

The actual numbers after the tax cut was passed showed an increase of $84 billion over the pre-tax cut projections for 1997 to 2000. Despite an almost 30% cut in the rate, capital gains revenues rose from $62 billion in 1996 to $109 billion in 1999.

Similarly, when Congress considered cutting the capital gains rate again in 2003, from 20% to 15%, the JTC estimated that this would cause a loss of revenue of $5.4 billion from 2003 to 2006. But after Congress passed the tax cut, capital gains revenues increased by $133 billion during those years, as compared to the pre-tax cut projections. As Dan Clifton of the American Shareholders Association said, “There is no excuse for this $138 billion error.” Capital gains tax revenue doubled from 2003 to 2005 despite a 25% cut in the tax rate.

Sep 26, 2011#84

PatrThom

So what we get from this is that when the rich get to keep more of what they make, they work harder at making more. In fact, those figures blatantly state the following:
In 1996, people who paid capital gains taxes earned 221.4 billion through capital gains.
In 1999, the capital gainers earned 545 billion through capital gains (more than 2x as much!).

I would submit instead that there were other factors at work which allowed the capital gainers to increase their income. For instance 1995 was the first year of the creation of so-called "private label" mortgage-backed securities. You might remember these things. They were kinda popular, and they were very good at attracting a lot of investors. Seriously, all these things did was make money (via capital gains) for the people who held them...until 2008.

All those quoted figures really say is that the income of the rich went up enough for the revenue generated by the capital gains tax to offset the decreased tax percentage. The JTC's estimates were flawed because they expected income to continue at precedented levels, rather than the unprecedented cash explosion that happened (such as the current gold bubble, which is another thing taxed as capital gains). I find it highly unlikely that this increase in taxable income was a direct result of the lowering of capital gains taxes. Otherwise, lowering the capital gains tax rate to 0% would generate the highest revenue of all, right? Those numbers say that all the government has done over the past decade+ is hamstring their revenue in an attempt to make/keep rich people happy. And now ~~they're~~ we're paying for it.

tl;dr: Correlation is not causation.

--Patrick

Sep 26, 2011#85

GasBandit

The 0% infinite profit thing is a fallacy, but it does illustrate that there's really a "sweet spot."

I don't think that all the investment income made since 1997 can be dismissed as a simple mixture of subprime mortgages and gold. There was a lot of stuff going on during that time.

Sep 26, 2011#86

PatrThom

I don't think it's all due to that mixture, either. All I'm saying is that the increase in capital gains revenue was not the result of the decrease in the rate. The rich were going to try to increase their income regardless of the tax rate, they have just been more successful at doing so than the 'experts' predicted.

Capital gains income is generated by buying into something (securities, gold, cars, collectibles, whatever), holding onto it, and then selling it for more, later. The only 'work' needed is in the warehousing of the thing (real or virtual) until the time comes to sell. If you want to create jobs, you raise the capital gains tax rate higher than the income/payroll tax rate, thereby encouraging people to shift their investment into things that generate income (ie, jobs, franchise, expansion) instead of capital gains (jewelry, real estate, futures).

--Patrick

Sep 26, 2011#87

GasBandit

So you're saying a better system would be to, say, lower payroll/income taxes and increase capital gains taxes?

Sep 26, 2011#88

PatrThom

I'm a technology nerd, not an economist (in fact, I came very close to failing college econ), but it does seem rather logical that making it more expensive to hoard (valuable) stuff would encourage a bit more spending and consumption. The other possibility I see is that the hoarders will just hold onto everything as long as they can, hoping the rate will go back down again. In that case, it makes sense for the rate to go up and down periodically so that people will dump their holdings now and again.

I did a little research regarding capital gains. The last time the government raised capital gains (in 1986-87, from 20% to 28%), revenue plummeted to half, and it stayed low for a decade. Of course, this was also the year of the big stock market crash. No idea whether the two were related, but the effects of that event (especially as it affected capital gains) persisted for a while. Capital gains revenue since has never fallen below 1984 levels (when rates were at 20%) regardless of whether the rate has been 28%, 15%, or anywhere between.

--Patrick

Sep 26, 2011#89

Adammon

PatrThom said:
I'm a technology nerd, not an economist (in fact, I came very close to failing college econ), but it does seem rather logical that making it more expensive to hoard (valuable) stuff would encourage a bit more spending and consumption. The other possibility I see is that the hoarders will just hold onto everything as long as they can, hoping the rate will go back down again. In that case, it makes sense for the rate to go up and down periodically so that people will dump their holdings now and again.

I did a little research regarding capital gains. The last time the government raised capital gains (in 1986-87, from 20% to 28%), revenue plummeted to half, and it stayed low for a decade. Of course, this was also the year of the big stock market crash. No idea whether the two were related, but the effects of that event (especially as it affected capital gains) persisted for a while. Capital gains revenue since has never fallen below 1984 levels (when rates were at 20%) regardless of whether the rate has been 28%, 15%, or anywhere between.

--Patrick

Consumption doesn't need to be encouraged, quite the opposite.

Sep 26, 2011#90

PatrThom

Really? I thought the key to economic recovery was to get money flowing out of people's pockets, not into them.

--Patrick

Sep 26, 2011#91

strawman

Some people are more interested in economic stability than economic recovery, and that fits their anti-consumer philosophy quite well without necessarily signing up as anti-capitalist.

Sep 26, 2011#92

Adammon

Rampant consumerism (spending more than you have) is what is causing these wild swings between boom and bust periods. The rapid expansion of credit hurts the poor, enriches the banks and moves us away from an economy built on a stable foundation. I'm not anti-consumer, I'm pro-reality.

Sep 26, 2011#93

strawman

Adammon said:
Rampant consumerism (spending more than you have) is what is causing these wild swings between boom and bust periods.

Perhaps you mean "is a contributing factor..."

Sep 27, 2011#94

PatrThom

Right. We don't necessarily need the middle class to go out there and spend 105% of their income like many of them did 5 years ago, but it would be nice if the folks sitting on big piles of money would see fit to return a sizeable portion of it to circulation. The economy needs money flowing through it in order to work. Reducing that flow to a dribble because someone upstream dammed the river makes it hard for the people downstream to make their living. Trickle-down economics, indeed.

--Patrick

Sep 27, 2011#95

papachronos

PatrThom said:
Right. We don't necessarily need the middle class to go out there and spend 105% of their income like many of them did 5 years ago, but it would be nice if the folks sitting on big piles of money would see fit to return a sizeable portion of it to circulation. The economy needs money flowing through it in order to work. Reducing that flow to a dribble because someone upstream dammed the river makes it hard for the people downstream to make their living. Trickle-down economics, indeed.

--Patrick

Does being invested not count as "in circulation?" I rather doubt the nation's wealthy are sitting on piles of cash like Scrooge McDuck. Even if the money is in a CD in a bank somewhere, it seems to me that the bank would then have more capital to loan, which would count as "returning it to circulation."

But then again, I'm no economics expert, nor am I as well read in the matter as I'm sure the majority of you folks who comment here are.

Sep 27, 2011#96

strawman

papachronos said:
nor am I as well read in the matter as I'm sure the majority of you folks who comment here are.

I don't know about anyone else, but I just make stuff up and post it. In the dark of the night when I'm all alone, I can only claim I'm a troll, or, thinking more positively, a "devil's advocate".

Speaking of BSing, the "rampant consumerism" is largely held up by credit debt. People wouldn't be spending so much money - even money they have - if they didn't know that should something go wrong they can instantly access thousands of dollars of credit to get them past difficult times.

Unfortunately even that "safety net" is damaged by long-term recession, so people are more careful with their "real" money, and are cutting back on use of credit.

Consumer credit is one of many things that made the USA such an economic powerhouse - few other countries embraced it as strongly as we have.

It's also one of the many things that makes recessions hurt more and take longer to recover from.

Money wouldn't flow so freely through the system without this form of debt, and as PatrThom points out, money has to move for the system to work. When a logjam occurs and banks stop lending to businesses, the whole system locks up.

In an ideal system, short term credit acts as a sort of buffer to prevent periods of no flow, and to prevent periods of excess flow. Both situations cause problems, and the risk of damage during those periods is large enough that people and companies would be much more careful with their spending if they couldn't rely on their short term credit lines.

Sep 27, 2011#97

Chibibar

papachronos said:
Does being invested not count as "in circulation?" I rather doubt the nation's wealthy are sitting on piles of cash like Scrooge McDuck. Even if the money is in a CD in a bank somewhere, it seems to me that the bank would then have more capital to loan, which would count as "returning it to circulation."

But then again, I'm no economics expert, nor am I as well read in the matter as I'm sure the majority of you folks who comment here are.

that would be true if they are investing in company/business that MAKE jobs. Investing money in Stock trading, money market account, and stuff like that doesn't really put money "into circulation" it just get swish around in wall street and end up in someone else pocket.

Sep 27, 2011#98

GasBandit

Chibibar said:
that would be true if they are investing in company/business that MAKE jobs. Investing money in Stock trading, money market account, and stuff like that doesn't really put money "into circulation" it just get swish around in wall street and end up in someone else pocket.

So maybe there should be higher taxes on capital gains from purchasing preowned stock, and lower taxes for buying at, say, an IPO? That way, the kind of investment that lets business get money to expand is encouraged.

Sep 27, 2011#99

Chibibar

GasBandit said:
So maybe there should be higher taxes on capital gains from purchasing preowned stock, and lower taxes for buying at, say, an IPO? That way, the kind of investment that lets business get money to expand is encouraged.

I don't know. This is where my limited economic knowledge stop short.

I know that people WITH money are "hoarding it" heck, even banks who get government help are hoarding it. It is NOT being circulated (as the government hope) to private sector. The people with money are just trading stocks (which the money doesn't go to the company BTW after initial BPO) so the money just get slush around back and forth and not really "doing" anything.

It is not being use to buy stuff. Even community college level (here in Texas) we are cutting back BUYING stuff, even much needed equipment which would promote economy.

Sep 27, 2011#100

PatrThom

GasBandit said:
So maybe there should be higher taxes on capital gains from purchasing preowned stock, and lower taxes for buying at, say, an IPO?

That's why there is a difference in the rates between short- and long-term capital gains. The rate on short-term gains is higher in order to discourage people from "flipping" assets at every available opportunity. Securities/investment is supposed to be long-term to allow the company/bank to know they will have that money long enough to be able to make a profit.

The trouble lately is that the investments (whether from bailout or private sector) are plumping up the companies just fine, but that is where it is stopping. The banks aren't lending* and corporate expansion is heading overseas. The money is coming from the public, but it is not returning to the public. If you've ever seen any diagrams of the water cycle, you can see how interrupting/diverting it will break the system. Credit is supposed to get people through the dry spells (or purchase things they would not normally be able to afford all at once, such as houses and cars), but irresponsible use of credit (by either borrower OR lender) just makes things worse.

--Patrick
*And there are memos from banks basically saying they are going to take the bailouts and sit on them "...to be better able to pursue any strategic opportunities." (ie, to buy up any banks that fail rather than lend to consumers)

Sep 27, 2011#101

Chibibar

PatrThom said:
That's why there is a difference in the rates between short- and long-term capital gains. The rate on short-term gains is higher in order to discourage people from "flipping" assets at every available opportunity. Securities/investment is supposed to be long-term to allow the company/bank to know they will have that money long enough to be able to make a profit.

The trouble lately is that the investments (whether from bailout or private sector) are plumping up the companies just fine, but that is where it is stopping. The banks aren't lending* and corporate expansion is heading overseas. The money is coming from the public, but it is not returning to the public. If you've ever seen any diagrams of the water cycle, you can see how interrupting/diverting it will break the system. Credit is supposed to get people through the dry spells (or purchase things they would not normally be able to afford all at once, such as houses and cars), but irresponsible use of credit (by either borrower OR lender) just makes things worse.

--Patrick
*And there are memos from banks basically saying they are going to take the bailouts and sit on them "...to be better able to pursue any strategic opportunities." (ie, to buy up any banks that fail rather than lend to consumers)

This is what I'm seeing. This is why I think bailout from the government level is bad. In this capitalistic world, other company will buy them up. It will happen, nothing will go "away" (we could all wish our mortgage will disappear but that is not gonna happen without consequences) Money is being "pump in" but it is going out overseas (This I agree) more and more jobs are going overseas because it is cost effective.

Between the Internet and long distant phones, it is sad that you can get tech support CHEAPER across the world with long distant call than hiring locally in the states

Sep 28, 2011#102

GasBandit

Also, the whole thing with the "the banks are not lending!"... I seem to recall there were polls saying that there were also not businesses applying for loans as much as previously. One thing's for certain when it comes to jobs... you don't take out a loan just to hire more people... you take out a loan to make capital investments (IE, equipment, facilities, etc)... and with the current hostile-to-business environment in Washington, it doesn't surprise me that businesses are more focused on battoning down the hatches to weather the storm. Increased regulation, increased taxes, and heck... the onset of obamacare... it's entirely understandable why we are where we are.

Sep 28, 2011#103

Krisken

GasBandit said:
Also, the whole thing with the "the banks are not lending!"... I seem to recall there were polls saying that there were also not businesses applying for loans as much as previously. One thing's for certain when it comes to jobs... you don't take out a loan just to hire more people... you take out a loan to make capital investments (IE, equipment, facilities, etc)... and with the current hostile-to-business environment in Washington, it doesn't surprise me that businesses are more focused on battoning down the hatches to weather the storm. Increased regulation, increased taxes, and heck... the onset of obamacare... it's entirely understandable why we are where we are.

Ok, that's a crock of crap. This is the worst Fox News talking point I've ever seen you spew, man. Bad. Very bad and wrong. You're better than this.

Sep 28, 2011#104

Chibibar

Krisken said:
Ok, that's a crock of crap. This is the worst Fox News talking point I've ever seen you spew, man. Bad. Very bad and wrong. You're better than this.

I think the current hostile-to-business enviroment would be.
MUST have insurance for worker in business (cost more money)
higher tax for business (cost more money. I think this is right. I get confuse with all the propose changes now)
Lending institution not lending money as much (not government related but a problem)

Sep 28, 2011#105

GasBandit

Krisken said:
Ok, that's a crock of crap. This is the worst Fox News talking point I've ever seen you spew, man. Bad. Very bad and wrong. You're better than this.

Fox news? Try WaPo.

Sep 28, 2011#106

Krisken

When multi-national corporations have record profits in 2010 and also cut jobs, it's hard to feel a whole lot of sympathy for proposed tax increases. Sorry guys, I'm just not buying this as overly hostile. Business has had it pretty damn good for the first three years with relaxed EPA regulations and tax incentives.

Sep 28, 2011#107

GasBandit

Krisken said:
When multi-national corporations have record profits in 2010 and also cut jobs, it's hard to feel a whole lot of sympathy for proposed tax increases. Sorry guys, I'm just not buying this as overly hostile. Business has had it pretty damn good for the first three years with relaxed EPA regulations and tax incentives.

Part of Obama's campaigning was that he looked forward to driving coal-based energy out of business (despite the fact that we have no viable alternative). Health care "reform" and financial "reform" were nothing of the sort - rather they were legislated government intrusion that addressed none of the underlying problems and added levels upon levels of bureaucratic burden to doing business in the US. We placed a moratorium on drilling in the gulf after the BP oil spill, yet loaned one billion dollars to PEMEX (mexican government-owned oil) to help it drill in the gulf, some of which is taking place just over the horizon from american island possessions. Relaxed EPA regulations? Tightening EPA regulations are making even a democrat senator squeal (granted, he's from WVA, which I'm sure a certain forumite is going to jump in here and reiterate that West Virginian politics is "owned by big coal") that they're costing jobs.

The fact of the matter is that "progressive" policy is hostile to business (capitalist) policy. And small businesses (the "backbone" of the US economy) are hurt much more than the "super multinational" companies because they don't have the economies of scale to weather the assault.

Sep 29, 2011#108

GasBandit

Government policy hostile to business is sure to push more "american" businesses to become multi-nationals. For good and ill, the borders to business are falling. If we want to maintain our economic edge, we have to give business an incentive to be here instead of where they can get labor for pennies on the dollar, not punish them for the privilege of paying their workers exponentially more.

Sep 29, 2011#109

Krisken

GasBandit said:
Government policy hostile to business is sure to push more "american" businesses to become multi-nationals. For good and ill, the borders to business are falling. If we want to maintain our economic edge, we have to give business an incentive to be here instead of where they can get labor for pennies on the dollar, not punish them for the privilege of paying their workers exponentially more.

That problem will fix itself over the next 20- 50 years, I promise you. Oil isn't going to last forever, and as the major oil nations production diminishes you'll see a whole lot more locally made goods. Of course, the cost of food will skyrocket and the population will need to decrease, but hey, globalization will no longer be the problem it is today.

Sep 29, 2011#110

GasBandit

Krisken said:
That problem will fix itself over the next 20- 50 years, I promise you. Oil isn't going to last forever, and as the major oil nations production diminishes you'll see a whole lot more locally made goods. Of course, the cost of food will skyrocket and the population will need to decrease, but hey, globalization will no longer be the problem it is today.

Sounds like the underlying impetus for the next world war.

Sep 29, 2011#111

PatrThom

That's only if Yellowstone doesn't blow up first.

--Patrick

Sep 29, 2011#112

Krisken

GasBandit said:
Sounds like the underlying impetus for the next world war.

It's pretty much why I've just about given up on arguing about politics. The more I examine the issues, the more they become moot. Once you accept that oil production is on the decline and our fuel sources will become scarce, things like global warming (terrible name for a complex issue) become incredibly silly.

We'll never see a boom like we did during the industrial revolution, at least not while we depend on oil to do it.

Sep 29, 2011#113

GasBandit

Krisken said:
It's pretty much why I've just about given up on arguing about politics. The more I examine the issues, the more they become moot. Once you accept that oil production is on the decline and our fuel sources will become scarce, things like global warming (terrible name for a complex issue) become incredibly silly.

We'll never see a boom like we did during the industrial revolution, at least not while we depend on oil to do it.

I call the hockey mask.

Sep 29, 2011#114

Krisken

I want to ride in a bucket being carried by a professional wrestler.

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