The Magnitude Of The Problem

[palladin9479]

If anybody sees a great big pile of cash that can be extracted from the current mess I wouled like to know:
http://www.zerohedge.com/news/2013-02-1 ... er-america

Lots of horse shit in there. Alarmism at it's finest, was surprised he wasn't trying to sell me a "solution". Whole host of half-truths and very little actual fact.

The debt problem within the USA is primary due to decades of having money being siphoned out of circulation at a rate faster then it's being created, this results in money needing to be "created" in the form of borrowing against ourselves to cover the difference.

Stop and think about it, you cry about "social services" and "welfare" being wastes of money yet where does that money go? Are poor people burning it to stay warm? No their spending it on consumer goods. Those goods are produced by companies who employ people. "Welfare" money is going straight into the US economy via the recipients. Hell even "defense" costs are mostly just money going to American companies that then pay workers. Money going to pay soldiers who then buy consumer goods with it. Money going to defense contractors who then pay engineers and technicians with it. As long as the money is going in circles then it can't possibly be creating a problem, the more you give to the people the more they spend / invest the more that companies make and the more taxes they ~should~ be paying. Unless it's not being recirculated, unless it's being redirected into offshore bank accounts and other "complicated financial instruments". In which case it's going from the government to the people to the corporations and then into hidden accounts to avoid being taxed which just forces the government to create more money that ends up in those same hidden accounts.

Now lets turn off the tap, lets cut medicare and ALL social services to zero. Make up some magic been that the population doesn't hang you while your at it. Instead now the lower class no longer has that money to use on consumer goods, namely food, shelter, lights and other necessities (and a few not-so-necessary items). Consumer demand plummets as a result of everyone going into hoarding mode. Companies are now paying for more workers then they need and start to fire them. Wages go down as companies go into hoarding mode. Welcome to a stagnant economy, the less spending that's happening by the consumer the less money being made and the less cash is available to be siphoned off. Spending on social services has never been a bad thing, provided it's done with the proper aim. Unfortunately a blind drunken sailor has better marksmanship then the liberals. Left to their own devices they would f*ck it all up. You only need to create a safety net big enough for most of your population to not go into hoarding mode, the sheep need to go to sleep at night with the feeling that even if things get bad, they'll still be "ok". As long as that's happening then they'll be good little producers for your economy, of course you can't do that for free and thus to ensure future profits the corporations must pay their part to keep the sheep happy.

Now call me a liberal again....

[MSimon]

Ohh don't get me wrong. The retirement of the baby boomer generation is going to hurt and hurt lots. Things are going to get pretty rough for the 20 some odd years it takes most of them to die. The healthcare industry is already smacking it's lips in anticipation of the potential profits it can make.

Those health costs are actually a big reason I absolutely hate the Republican party right now. They've sheltered and sponsored the creation of this monster healthcare industry that should never of existed in the first place. Mind as well make a company who's business plan revolved around charging people to breath. If someone doesn't pay then you cut off their oxygen supply until they pay or it no longer matters. Would have sky high profits, a veritable money making machine. Whomever found a way to get congress to back the law requiring you to pay for your oxygen would be instantly powerful. That's a debate for a different day.

Suffice to say, once that generation has died off the country will finally be able to return to prosperity.

Well I have a plan to slash health care costs.

Medical Marijuana prohibition is a crime against humanity and a violation of the religious precept - heal the sick.

Changes in endocannabinoid levels and/or CB2 receptor expressions have been reported in almost all diseases affecting humans,[34] ranging from cardiovascular, gastrointestinal, liver, kidney, neurodegenerative, psychiatric, bone, skin, autoimmune, lung disorders to pain and cancer.

CB2

=====

And reducing the prison population. End the DEA.

Then we end the FDA as a regulatory agency. Make it advisory. (FDA seal of approval) and allow private competition.

[MSimon]

palladin,

You are not thinking clearly. Taxes are a % of the economy. Say 50% to make the numbers easy. Government doubles the size of the economy with spending. What do you get from that? A deficit of 25% of the economy. Assuming that before doubling things were in balance.

In developing countries the multiplier from government spending can be well above one. Maybe 1.5X , maybe 2X. If they spend it on the right stuff. Roads, power plants, etc. In developed countries the multiplier is below 1. And if the money goes into some one's pocket? The multiplier is zero or very close.

From what I have seen liberals are innumerate. You are not one of those are you?

[MSimon]

This boomer has unretired:

http://www.ecnmag.com/tags/Blogs/M-Simon/

[JLawson]

palladin,

You are not thinking clearly. Taxes are a % of the economy. Say 50% to make the numbers easy. Government doubles the size of the economy with spending. What do you get from that? A deficit of 25% of the economy. Assuming that before doubling things were in balance.

It's like taking two pitchers of water, and pouring one into the other... while losing 10% each time to spillage. You're not getting any more water, though the activity of pouring water from one pitcher to the other may be pleasing to you and may make you think you've got two full pitchers - but after a while you'll have a lot less water than you started out with.

You take money from the government, subsidize a particular business, then tax that business... you're not going to get back anything close to what was spent. And if you're expecting increased revenue from folks using the product of that business in their own endeavors, it might be a good idea to check and see if that subsidized product is something that someone would want in the first place. If not, then all you're doing is making yourself feel better at the expense of the folks who get taxed to provide your entertainment.

Tossing tax money out to 'stimulate' the economy MIGHT work, if properly directed. To increasing a production base, perhaps. (WW2's a good example - but the money spent by the government was spent MAKING things, and because there weren't sufficient workers to make things, people were also taught useful skills that they could put to work for themselves.) But the current 'stimulus' programs have been a bad joke with the punchline that nobody's doing better but the politically connected.

In developing countries the multiplier from government spending can be well above one. Maybe 1.5X , maybe 2X. If they spend it on the right stuff. Roads, power plants, etc. In developed countries the multiplier is below 1. And if the money goes into some one's pocket? The multiplier is zero or very close.

I could be persuaded the multiplier actually has a negative component - in that the money funneled to the politically connected is in turn used to collect even MORE money. And where HAS most of the $5 trillion in deficit spending gone over the last 4 years, anyway?

From what I have seen liberals are innumerate. You are not one of those are you?

If someone dresses like a duck, waddles like a duck, talks and acts and floats and quacks like a duck, you've got to think they know they're doing it and there's a certain duckish component in their thinking... no matter how much they insist they're an aardvark.

[hanelyp]

The truest (if difficult to quantify) measure of an economy is the goods and services available. Not the flow of money, which can be forced, and the value of which is not fixed. Not the sum of persons employed, not all jobs producing equal value, or even necessarily a net positive value in the case where force is employed to produce the job.

Transferring money from one party to another generally does nothing to improve that. It even tends to decrease available goods and services, reducing the reward to the producer and removing the recipient from whatever they might otherwise do to produce.

[ladajo]

This boomer has unretired:

http://www.ecnmag.com/tags/Blogs/M-Simon/

I see this as a retirment part time at best gig. Not a real job.
You are on contract as a "Technical Contributor" for blog posts. Can't see that paying much. But it is something.

I had posted something to this effect before, but it seems to have been deleted.

It was the same post where I asked you how long you had been a navy nuke for.

[paperburn1]

This boomer has unretired:

http://www.ecnmag.com/tags/Blogs/M-Simon/

I see this as a retirment part time at best gig. Not a real job.
You are on contract as a "Technical Contributor" for blog posts. Can't see that paying much. But it is something.

I had posted something to this effect before, but it seems to have been deleted.

It was the same post where I asked you how long you had been a navy nuke for.

sometime post that prove a point "get lost"

[Teahive]

4a. And switch over to the Fair Tax. You want companies to come back from overseas and prosper? Take away the legislation and taxation that's driven them off. After implementing the Fair Tax, abolish the insane tax structure that's grown around favoritism and loopholes.

I would agree that the FairTax is a better system than what is currently in place.

It's interesting, though, that the FAQ answers the question "Is the FairTax progressive? Do the rich pay more and the poor pay less as a percentage of their spending?"
Given that the FairTax is supposed to mainly replace taxes on income you'd expect that a far more frequent question is the progression of effective tax rate based on income (or wealth for that matter).

I leave you with two videos. You may know Bill Whittle - I'd ask you to watch and listen to them carefully, and think about the concepts in them seriously.

http://www.youtube.com/watch?v=661pi6K-8WQ

http://youtu.be/KkXI-MNSb8Q

The idea that wealth is not zero-sum is certainly not a conservative exclusive.

First and foremost a cap of 25% income tax on "disposable income" for $250,000+ individuals. It can scale down under that but if your making a combined (salary and ALL compensation) quarter million a year of disposable income then 25% is not much to ask. Notice I use disposable and not gross, gross is a very dumb way to tax people as certain occupations and areas have higher costs of living then other occupations and areas.

There is a reason some areas/houses/cars/educational institutions are more expensive than others. And it is a choice. Everything above a minimum standard is "disposable".

The truest (if difficult to quantify) measure of an economy is the goods and services available.

I'll go further than that and say it's quality of life (which is even more difficult to quantify). One might argue that this goes beyond economic concerns, but I do think that, at a minimum, time needs to be considered alongside goods and services.

[Diogenes]

palladin,

You are not thinking clearly.

Amen! Right on! Absolutely! Undoubtedly! Essentially correct! Right on Target! End. Finito Full stop!

[Diogenes]

You might appreciate some of my points here:

viewtopic.php?p=97783#97783

We get the welfare state in part because we take so many men out of the market with prohibition. And prohibition itself is a dead weight loss. And it gives us single mothers. Who support socialism.

Obama is a self inflicted wound. Originally the causes were inflicted by the left. After the left has abandoned them the right comes in to support them as "tradition".

You can't fool mother nature. Even with religion.

Why do you insist on reversing cause and effect? It's the single mothers which raise criminal men. (Not all, but most.) Fathers give children discipline, without it they do not respect rules.

[Diogenes]

It's not "Obama's Budget" it's every budget passed by Congress since Reagan, probably before. Clinton was the only one who was remotely successful.

You have obviously been deprived of information which is essential to understanding past events. Clinton was dragged, kicking and screaming, into a balanced budget by the Republican Congress of 1994. (Don't you remember the big war to shut down the government? )

Pretty specific numbers, the biggest by far is the Defense Budget.

You mean the biggest role of the Federal government is national defense? NO! You're Kidding!

I thought US FEDGOV existed as a charity or something. You mean it actually defends the nation? Whoda thunk?

Section. 8.
The Congress shall have Power :

To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And

Social Security looks big until you realize it's paying for itself (for now) via the SS tax.

All the money in the Social Security trust fund has been raided by the Democrats (Tip O'neal) when they were in power, and replaced by IOUs. The accounts are essentially empty. Current revenues are now being exceeded by disbursements. It's just going to get worse. From the time Roosevelt first thought of it, Social Security was never a workable system.

After that is Medicare which unless your willing to kill off half the Republican voting base, you don't touch.

Don't care anymore. Somethings got to give, I say cut the brake cables and let this b*tch fall.

[Diogenes]

On the other hand, never mind. I've read through some more of your scrawl, and decided it isn't worth the trouble.

[palladin9479]

palladin,

You are not thinking clearly. Taxes are a % of the economy. Say 50% to make the numbers easy. Government doubles the size of the economy with spending. What do you get from that? A deficit of 25% of the economy. Assuming that before doubling things were in balance.

In developing countries the multiplier from government spending can be well above one. Maybe 1.5X , maybe 2X. If they spend it on the right stuff. Roads, power plants, etc. In developed countries the multiplier is below 1. And if the money goes into some one's pocket? The multiplier is zero or very close.

From what I have seen liberals are innumerate. You are not one of those are you?

You don't tax a percentage of the economy you tax the net profits or gains of the economy. Government needs money to run, without money there is no government, without government there is only the law of the jungle. This law is universal and applies to all humans, including those running powerful corporate empires. Without imposing the same restrictions upon them that you impose on common thugs they will do the exact same thing as common thugs would do.

At this point in time I believe people are now putting on blinders and twisting words around to attempt to avert seeing the truth. That the powerful and politically connected (on both sides of the isles) have been abusing the system to drain away net profits from the middle class. This has gone on for so long that they've dug deeper and drained away principle from the middle class as well which in turn required the government to *create* money to avert a total breakdown of the financial system. I've outlined it very nicely, net profits are made from the flow of equity in a big circle from consumer to supplier back to consumer. That equity is expressed in cash amounts but could just as easily be shiny beads. The water analogy is completely ignorant as water doesn't spontaneously create more water, yet investment and markets do indeed spontaneously create more wealth and equity. The government taxes the net equity produced not the original principle or capital. If a company does not produce net profit then there is nothing to tax and the government moves on. This can be applied to a person and would have much the same results, those who created surplus would be taxed only on the surplus, those who aren't able to create surplus simple aren't taxed. That is why I used disposable income and was very careful to define it, because the term "necessity" tends to be thrown around needlessly without any thought to what is required to not only continue breathing but to be a productive member of society. The goal is to create more productive members of society who can at least pull their own weight if not contribute to a surplus.

And yes Simon legalizing Pot would, reduce medical prescription costs, reduce social costs from supporting artificially created non-productive members and create an opportunity to tax surplus profit from a new market.

The "Fairtax" is just an idea for the wealthy to pay even less on taxes then they do now. Of course so many people were duped into following it. It's extremely regressive on higher income people, especially those making more then $1,000,000 USD a year of surplus. Mostly because it's a flat rate with no exceptions for cost of living, thus it taxes the poor the hardest while taxing the rich the lightest. And while the rich spend more as a flat number, as a percentage of income they spend far less then middle class and poor. The working poor spend the most as a percentage of income, nearly 100%. So a 30% flat tax on spending would be a 30% tax on poor, 20~25% tax on middle class and 5~10% tax on wealthy and 1~2% tax on super wealthy. Might as well just declare those making seven figures of surplus a year "tax free" while your at it. Increasing the price of all consumer goods hurts those barely making it by. If you doubt this then go research the energy poor in the UK. Their tax on energy produced (for climate change nonsense) directly raised the cost of all goods across the board. Those making nice money weren't effected one bit, those in the middle group were hurt but nothing life altering. Those barely making it no longer have the money to run the heater and buy food and must make a choice between the two. That tax is anything but "fair", one of the worst tax ideas in the history of tax ideas.

Taxing disposable at a flat rate income is the fairest method. It hits everyone equally, the rich and the poor. If someone is already spending nearly all income on necessities (home + transportation + food + utilities + education) then taxing them becomes counterproductive. If after those expenses someone has $200,000 of surplus then taxing it at 25% isn't going to put them in the poor house, its not even going to effect their quality of life.

But please continue to believe it's the single mother with two children that is taking all your money. It's what Fox news tells you so it MUST be true. After all we should take them outside, shoot them, skin them and hang their heads from the power lines as warning to any who would dare not produce. Or would you rather we do what China does and force abortions on mothers now rich enough to pay the fee for extra children?

Come on someone make a comment about that same single mother driving a SUV, I know you want to.

[palladin9479]

Now if you really want to impose a form of sales tax to fund government then there is indeed a way to go about it. I just happen to live in a country that does just that and the way they do it is sneaky as hell, the rich don't even know their being taxed.

First and foremost you must define what is necessary to survive and be a productive member of society. The products in this category do not have a sales tax imposed on them. Here in SK this is done by the cost of a product. It's a form of progressive sales tax on goods sold though sellers are prohibited from displaying it on the sales receipt. Buying food from a local market is cheap as that food has no tax on it. Buying imported food is expensive as that tax has been applied to that food. Same with clothing, buying a pair of locally made jeans is ~$20 USD. Buying a pair of Levi's 550 at the department store is approx ~$250 USD (their $50 on amazon). Buying a cheap Matiz, Pride or other domestic economy car is $10,000 to $15,000. Buying a domestic luxury car is $50,000 or more. Buying a foreign luxury car is nearly double the cost, $80,000 for a BWM 3 series ($40,000~$50,000 USD in the states). Property tax on a small two bedroom apartment / home is non-existent, property tax on a four bedroom is noticeable and anything larger gets quite expensive. Utilities are even metered this way with multiple tiers of usage. The first tier is cheap, priced at cost or slightly under. After you passed that mark the next tier's cost is doubled, after you pass into the third tier the cost is doubled again and eventually it doubles again.

All this combined creates a very low cost of living if you live small, if you live large and flashy your paying out the nose for that privilege. If your living in between then your only paying big for your luxuries, you always have the option of scaling down your life style and Korean's often do exactly this.

Of course the rich won't ever support this system in the USA, they want to pay less then the mere common man. And because the wealthy and connected won't get behind it the politicians won't support it and thus it'll never happen.