patrick.net

thomaswong.1986 says

You have no real plan to increase employment and incomes. NONE!

You don't get it. Achieving a better distribution of income and wealth will lead to more demand, more jobs, and higher median incomes. It is the biggest problem the US faces right now.

Reality says

During inflation, those who get the newly created money first gain at the expense at those who get the money later.

OK--let us know how that works. How does one "get" the money first. Can I just walk up to the Fed window and ask for $1MM? Do I have to have a certain income level to get in line?

Reality says

The rich can borrow new money into existence far more readily than the middle class and the poor can.

So, I'm assuming when I look at borrowing by income level, we'll see a big jump in borrowing by the top 1% during inflationary periods? No? That's not right?

Reality says

The rich can leverage at far higher multiples than the middle class or the poor can. The rich banksters can leverage at 50:1 or higher; the middle class can borrow at only 2:1 for trading the same equities; the poor don't have the credit to borrow at all.

Your contention is that the rich were borrowing during the crisis?

Reality says

During a crisis, the FED Window of special lending is only open to the rich.

The "window of special lending"? Really? Which window is that? Reality says

Do you need a graph to prove to you 1+1=2 to go with that?

No--just a graph that shows causation between inflation and inequality. It should be easy to show. Unless that theory is complete and utter BS, that is...

Reality says

The government officials are creating new money for specific group of cronies to receive it

Interesting--who is the US government creating money for and who exactly is getting it? How are they getting it? That darned window of special lending again?

Call it Crazy says

Nah, Tat would rather whine about inequality..... it's easier than working...

lol--you think I'm living in Westfield off of welfare?

Call it Crazy says

Wah Wah Wah... poor baby.. "Tat translation: "I'm not getting mine".

I'm doing fine, thank you. If I were voting for policy based only on self interest, I'd be voting Republican. The problem is that I understand how economies work...

Internet Axiom #9556:
When one has to publicly and repeatedly announce the fact that they are not reading posts of people they have ignored, they most certainly are under an alias.

marcus says

tatupu70 says

Call it Crazy says

...due to the incompetence, laziness and lack of ability by the working class...

Nominated.

Yeah, for troll of the month prize. Not that I can see the rest of his nonsense.

drew_eckhardt says

tatupu70 says

Hike capital gains taxes. Make income tax more progressive. Keep a significant estate tax.

America already has the most progressive income tax system (defined as ratio of tax share to income share among the top earning decile) out of the entire OECD 24 including Australia, Austria, Belgium, Canada, The Czech Republic, Denmark, Finland, France, Germany, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, The Netherlands, New Zealand, Norway, Poland, The Slovak Republic, Sweden, Switzerland, and The United Kingdom.

Obviously that does not work and we should try fairer approaches like a flat tax.

Once average people have some skin in the game they might stop voting for politicians who spend their money enriching key industries (like defense) at our expense.

Agreed. Skin in the game is what matters.

http://nassimtaleb.org/category/skin-in-the-game/

"America already has the most progressive income tax system"

and yet Romney paid 14% in 2011. Funny, that.

http://money.cnn.com/2012/09/21/pf/taxes/romney-tax-return/

http://research.stlouisfed.org/fred2/series/CP/

is the problem, mate.

But I do agree taxes have to double across the board. Our tax-to-GDP rate is comically low compared to those OECD nations.

http://2.bp.blogspot.com/_ZTcCp8eYEyI/S7t-wtj-UAI/AAAAAAAAAQs/6V5-fK6D_fw/s1600/oecd+gdp.PNG

Low taxes on the masses just results in higher home prices and rents in the end.

Bellingham Bill says

"America already has the most progressive income tax system"

and yet Romney paid 14% in 2011. Funny, that.

he already paid his tax on salary, no point double taxing it... reinvested his AFTER TAXED Salary into investments.

others may have made some capital gains and some didnt.

yea.. so whats wrong with that ?

tatupu70 says

I'm doing fine, thank you. If I were voting for policy based only on self interest, I'd be voting Republican. The problem is that I understand how economies work...

If you do, can you point to economic theory/history which will show

increasing the tax rate actually increases tax receipts ?

Did such a policy do better than the Kennedy or Reagan tax cut ?

and dont bother with the Clinton tax increase.. its a myth!

Or is your understanding all about.. "lets go after the rich" political nonsense and

not about Economics at all.

bob2356 says

thomaswong.1986 says

Its all fairly clear, the Lefty plan to hike taxe rates is NOT to increase tax revenues, that can be accomplished by lower tax rates and greater employment. Already directly proved by Kennedy, Reagan and Bush.. and indirectly by Clinton.

So that's how we got 16 trillion dollars in debt, all that increase in tax revenues.

Even the NYT was surprised at the increase in Tax Revenues from the Bush Tax Cut..(2006) how we soon forget... Step up Bob, add to the discussion your idea to increase jobs, expand economy, and increase tax revenues. It worked for Kennedy, Reagan and Bush.

Surprising Jump in Tax Revenues Is Curbing Deficit

http://www.nytimes.com/2006/07/09/washington/09econ.html?pagewanted=all&_r=0

tatupu70 says

That's the wrong definition--try again.

Nope.

A progressive tax is a tax in which the tax rate increases as the taxable base amount increases. The term "progressive" describes a distribution effect on income or expenditure, referring to the way the rate progresses from low to high, where the average tax rate is less than the marginal tax

How income determines tax rates has no direct connection to do with how much money different people make.

It has the worst inequality--that's why it's worst by your definition.

Nope. Income distribution doesn't matter, just what your share buys.

I hung out with poor coffee farmers in Mexico, where by "poor" I mean no electricity, no running water, no glass in the windows of the family tin-roof shack.

97.8% of Americans living in "poverty" have refrigerators. 83% have air conditioning. 75% own cars. 44.9% have dish washers.

According to your logic, those Mexicans who lack clean water are better off than American "poor" because the bottom quintile has 4.9% of the income pie versus just 3.3% in America.

Obviously that's not the case.

thomaswong.1986 says

If you do, can you point to economic theory/history which will show

increasing the tax rate actually increases tax receipts ?

Did such a policy do better than the Kennedy or Reagan tax cut ?

and dont bother with the Clinton tax increase.. its a myth!

Or is your understanding all about.. "lets go after the rich" political
nonsense and

not about Economics at all.

So when Tax receipts where 20.6% of GDP in 2000, compared to 16.2% of GDP in 2003, thats a Myth? $2.3T in 2000 in constant 2005 dollars vs $1.9T in 2003 is a myth?

$2T in 2000 vs $1.78T in receipts (nominal dollars) is a myth?

ie Increasing the deficit $200 billion in three years by cutting taxes.

OK, so that is showing the opposite, when lowering tax rates lowered the receipts.

So, show when raising the rate raised receipts...how about
17.5% of GDP, $1.48T in 2005 dollars, and $1.15T in nominal receipts in 1993 vs 18.4%, $1.69T (2005 dollars) & $1.35 (nominal) in 1995?

ie Lowering the deficit $200 billion in 2 years by increasing tax rates.

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

drew_eckhardt says

According to your logic, those Mexicans who lack clean water are better off than American "poor" because the bottom quintile has 4.9% of the income pie versus just 3.3% in America.

No--that's not my logic. My logic is that when income/wealth inequality gets to current levels, then the economy stops working.

thomaswong.1986 says

Even the NYT was surprised at the increase in Tax Revenues from the Bush Tax Cut..(2006) how we soon forget... Step up Bob, add to the discussion your idea to increase jobs, expand economy, and increase tax revenues. It worked for Kennedy, Reagan and Bush.

The tax revenue was 500 billion less each year 2008-2013 vs 2006. The tax rates didn't go up, where is all the extra revenue from the Bush tax cut those years? Maybe the tax revenue in 2006 had something to due with an epic bubble in the economy? No of course not it had to be the tax cuts in the right wingnut fantasy world.

tatupu70 says

You don't get it. Achieving a better distribution of income and wealth will lead to more demand, more jobs, and higher median incomes. It is the biggest problem the US faces right now.

Hi Tatupu, I have a question about this if you don't mind. Overall I agree with this statement; I can observe from my rich friends and lower-income friends that lower-income people spend more of their income than rich. Person A makes 10x person B but doesn't spend 10x on food, clothes, cars, etc.

On the other hand, as disparity has increased, the personal savings rate has declined. 11% in the early 80s, 7.5% in 1990, 5% now.
http://research.stlouisfed.org/fred2/series/PSAVERT/

I can't see how to make these two ideas square up. Perhaps it has to do with the details of the savings rate; the denominator is "disposable personal income " which is income minus taxes. Taxes as a percentage of gdp are low now, so this increases the denominator and reduces the savings rate. Perhaps the top echelon of the rich get money in ways that are not counted as "income".

Any thoughts?

tatupu70 says

drew_eckhardt says

According to your logic, those Mexicans who lack clean water are better off than American "poor" because the bottom quintile has 4.9% of the income pie versus just 3.3% in America.

No--that's not my logic. My logic is that when income/wealth inequality gets to current levels, then the economy stops working.

So what you're saying is that the economy has stopped working??

Odd, it seems to me that the economy is running as strong now as it ever has.

The only obstacle left to hurdle is housing. For every degree we lower housing costs, we would see the economy ramp up another click.

Look outside your window

errc says

So what you're saying is that the economy has stopped working??

No--I was being too loose with words there.

errc says

Odd, it seems to me that the economy is running as strong now as it ever has

I would disagree with that statement though. With unemployment at current levels, I don't think the economy is running as strong now as it ever has.

errc says

The only obstacle left to hurdle is housing. For every degree we lower housing costs, we would see the economy ramp up another click.

Look outside your window

I strongly disagree with this statement. While it would be great if one could suddenly lower everyone's mortgage while keeping their equity intact, in reality, lowering housing prices would almost certainly cause another recession. Look what happened in 2008.

SiO2 says

Perhaps the top echelon of the rich get money in ways that are not counted as
"income".

Bingo.

http://research.stlouisfed.org/fred2/graph/?g=qEc

Slope of GDP > slope of PI.

bob2356 says

thomaswong.1986 says

Even the NYT was surprised at the increase in Tax Revenues from the Bush Tax Cut..(2006) how we soon forget... Step up Bob, add to the discussion your idea to increase jobs, expand economy, and increase tax revenues. It worked for Kennedy, Reagan and Bush.

The tax revenue was 500 billion less each year 2008-2013 vs 2006. The tax rates didn't go up, where is all the extra revenue from the Bush tax cut those years? Maybe the tax revenue in 2006 had something to due with an epic bubble in the economy? No of course not it had to be the tax cuts in the right wingnut fantasy world.

What is the problem with cutting tax rates across the board for working people while decreasing spending at a comparable rate?

I would disagree with that statement though. With unemployment at current levels, I don't think the economy is running as strong now as it ever has.

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

In my opinion, "unemployment" isn't the greatest gauge of the strength of the economy. Maybe in the olden days, but not in present time. If we can produce everything everyone needs and wants, without every last poor soul being worked to the bone, I believe we can still have a strong economy?

Actually, that is desirable,no

That's why I posit the economy is as strong as ever. Lean and mean. If you're concerned that everyone be made to work, than pine for the 20 hour work week

Analyzer says

What is the problem with cutting tax rates across the board for working people while decreasing spending at a comparable rate?

Where to decrease spending? That's the difficult question. It's easy to speak broadly, but difficult to actually implement.

errc says

In my opinion, "unemployment" isn't the greatest gauge of the strength of the economy. Maybe in the olden days, but not in present time. If we can produce everything everyone needs and wants, without every last poor soul being worked to the bone, I believe we can still have a strong economy?

Actually, that is desirable,no

That's why I posit the economy is as strong as ever. Lean and mean. If you're concerned that everyone be made to work, than pine for the 20 hour work week

I do pine for the 20 hour workweek. Because I don't think our current economy produces everything that everyone needs or wants by any stretch. 50% of the people have nothing. There's no way we are producing everything they need or want. They can't afford to pay for it, so there's no reason to produce it....

50% of the people have nothing??

I'm not sure what your definition of nothing is. I'm gonna go out on a limb and guess you're yet another one of the long line of patnet posters completely disconnected from the realities of us poor people in this country

errc says

50% of the people have nothing??

I'm not sure what your definition of nothing is. I'm gonna go out on a limb and guess you're yet another one of the long line of patnet posters completely disconnected from the realities of us poor people in this country

OK--50% of the people have very little disposable income. Do you like that one better?

tatupu70 says

Analyzer says

What is the problem with cutting tax rates across the board for working people while decreasing spending at a comparable rate?

Where to decrease spending? That's the difficult question. It's easy to speak broadly, but difficult to actually implement.

Do we have a revenue problem, a spending problem, or both? Who can lay this all out for us in simple terms?

http://research.stlouisfed.org/fred2/series/W068RCQ027SBEA

says we mostly have a spending problem.

http://research.stlouisfed.org/fred2/graph/?g=qF1

is real spending per employed person, 2009 dollars

We need to cut spending 30% to get back to 1990s levels.

But if we cut spending, I think GDP would collapse since gov't is performing the "central redistributor" role in the economy, recirculating money from the 1% and overseas back into the paycheck economy (where it belongs!).

e.g. cut DOD back to 1990s levels:

http://research.stlouisfed.org/fred2/series/A824RX1Q020SBEA

is a $200B/yr cut. Let's say we get 1 job per $200,000 spending, that's a million jobs right there, but the true ratio is probably one job per $50,000, or less.

The DOD isn't throwing this money into a furnace, it's hitting every congressional district in the country, every month.

Where I live I see ANG F-15s punch holes in the sky, that's $40M/yr in payroll and $20M in supplies, maybe good for 1000 jobs here, 1 out of 400 jobs in the county.

And that's just a single squadron!

But if we can't cut spending, then we have a revenue problem.

Taxes could in fact go up a lot this decade and next, since they're so low now.

I think we need to double FICA over the next 20 years, raising it 10 bps a quarter or something, and then pay out whatever that added revenue adds to SSA's coffers.

Problem with raising taxes is that it has to, I think, come out of home valuations in the end.

Japan has this problem, they've painted themselves into a horrible corner trying to support their sky-high land valuations by hook or crook.

The Eurosocialist nordic states, UK, Canada, Oz, too. Same problem, letting housing get so, so out of control.

tatupu70 says

50% of the people have nothing.

"Fewer than one in four Americans have enough money in their savings account to cover at least six months of expenses"

http://money.cnn.com/2013/06/24/pf/emergency-savings/

and yet

http://research.stlouisfed.org/fred2/series/CUUR0000SEHA

can't work just 20 hours and pay the rent, no way no how.

Housing is why we're broke, but nobody gets this.

It's really weird.