patrick.net

The problem with socialism is that it's mostly socialism for the very rich.

Why do we keep taxing the common people to bail out failed bankers?

Why do the very rich pay only 15% income tax on the interest and dividends they skim off the work of others, while the actual workers pay 28% on honest labor?

Nomograph says

Why do we keep taxing the common people to bail out failed bankers?

Unfortunately, it’s because people need banks. If the banking system failed, it’s unlikely your website would even be here.

Banks sometimes ARE useful, but we DON'T need inflation, fractional reserve lending nor would the world end if we had to start back over with the people's money gold, silver, cigarettes or whatever else people freely choose as medium of exchange. Assuming they were free to pay taxes any way they want.

Why do the very rich pay only 15% income tax on the interest and dividends they skim off the work of others, while the actual workers pay 28% on honest labor?

LOL, at the height of my naivete I asked this question in a LTE to the Fresno Bee ca. 1984. Later on I hit on the concept that the System needs more entrepreneurs than laborers.

Clearly the wealth divide in this country points to a problem with that.

To address Ray's points, I think socialism can work fine without any redistributive "wealth transfer". Labor just needs to be taxed sufficiently to pay for the public goods and services it consumes.

I come to this position via my belief that all taxes come out of rents.

The model for this is Social Security, a mildly redistributive government retirement insurance that marginally benefits the lower middle class at the expense of the upper middle class.

Canada-style "single payer" national health insurance also works on this model, with medical insurance being taken out of wages by the state, something ObamaCare (and RomneyCare) is half-step towards with the mandate that people purchase insurance coverage or pay the man.

Norway takes this to the extreme, with high taxes and a very high level of public goods and services. They are the opposite of broke. Their pension fund has sequestered their surplus oil revenue, preventing needless inflation and now they have $450B ($90k per capita) invested in global equity.

Modern economies are terribly productive. There is no crisis in socialism, only a crisis in good government. It only takes one bad government to wreck everything, that is the statist core problem. Socialism will in fact fail if there is too many public goods without the taxes to pay for it.

Libertarianism has its own problems that I don't feel the need to get into here.

Yes, things are so falling apart in socialized France that they might have to raise the retirement age to 62 and the people are PISSED.

And yes it is a preview of what's happening here, except many boomers will work till 70 at least, and many others will simply work as long as they possibly can. I would be embarrassed to quote whoever the idiot was who called SS a ponzi scheme just because of 2 factors:

1) our life expectancy has grown

and

2) the boomers are a large group to pay retirement benefits to

Unfortunately we have to deal with both at once. So we raise the level that payroll taxes are paid on (a little) and they are already phasing in the rise of retirement age to 67.

I'm far more disturbed by the 2 or 3 trillion WE CHOSE to spend on the Iraq war, than I am by the consequences of 1 and 2 above.

The problem with Europe and the States at the moment is that they've been systematically looted by their ruling/banking/capitalist class.

Banking tricks and government bailouts are not socialism.

Your problem with socialism is that you have no idea what the hell you're talking about. Like how you've quoted the clever quip from Thatcher, you just pick up euphemisms as you skim along articles and imagine that they're a substitute for actual knowledge.

Actually it is possible to exist without banks, here's two examples:
http://www.wimp.com/weirdbanking/
http://www.wimp.com/freehelp/

Why do we keep taxing the common people to bail out failed bankers?
Why do the very rich pay only 15% income tax on the interest and dividends they skim off the work of others, while the actual workers pay 28% on honest labor?

Why do keep taxing common people to support people too lazy to work.
Why do liberals think only super rich people have dividend and interest income?

BTW, interest income IS taxed the same as labor. Check your tax forms.

Nomograph says

Why do we keep taxing the common people to bail out failed bankers?

Unfortunately, it’s because people need banks. If the banking system failed, it’s unlikely your website would even be here.

The banks are failing, the banks are failing, the banks are failing. Just chicken little BS to loot the taxpayers. Banks have been around since the beginning of time. There are plenty of ways to stabilize banking without throwing taxpayer money at them. If the too big to fail banks had to operate under bankruptcy court life would go on just fine.

Why do we keep taxing the common people to bail out failed bankers?

Or failed corporations such as GM, Lehman, Goldman, AIG, Fannie, Freddie, etc.? Note too that you don't see the Federal Gov't coming to the aid of small business owners ... only the mega corporations get the Fed's attention and help. Also, the big banksters knew the federal government would bail them out; precisely why (moral hazard) they wrote so many high risk loans.

marcus says

I would be embarrassed to quote whoever the idiot was who called SS a ponzi scheme just because of 2 factors:
1) our life expectancy has grown
and
2) the boomers are a large group to pay retirement benefits to

Add to that several other obvious factors that you neglected to mention: first, SS was NEVER intended to be a "retirement system.' It was intended to be supplemental, and primarily, for people that had no retirement system through their work. Second, it has broadened its beneficiaries dramatically to include all kinds of categories and situations other than retirement. Third, like Ponzi, it has in fact taken money that was paid into the system and used it for other expenditures via the general fund.

RayAmerica says

Also, the big banksters knew the federal government would bail them out; precisely why (moral hazard) they wrote so many high risk loans.

I read this a lot on here and I don't get it. How did it work for Lehman? Or Wachovia? Or IndyMac? Not sure how you can come to that conclusion...

tatupu70 says

How did it work for Lehman?

Check this out:

http://www.ritholtz.com/blog/2009/11/bear-stearns-lehman-execs-kept-billions/

RayAmerica says

Third, like Ponzi, it has in fact taken money that was paid into the system

"It' being our government, yes. That's our problem and not SS's.

Alaska's permanent fund owns treasuries too but I don't see you railing about how Uncle Sam has spent their savings.

and used it for other expenditures via the general fund giving tax cuts to the wealthy.

Now that it's coming time to reverse these tax cuts, the right is playing poor. Ima gonna laugh my ass off if this theft actually works. $2.5T taken from the middle class like candy from a baby. Good effort, conservatives. Wish I was half as ruthless as you.

zzyzzx says

Why do keep taxing common people to support people too lazy to work.

Why do you like beating on strawmen here?

Why do liberals think only super rich people have dividend and interest income?

Sorry, I meant capital gains and dividends are currently taxed at only 15%, not interest and dividends.

Sure, lots of people get those, but they should be taxed at 28% and actual work should be taxed at 15%. Not the other way around like it is now.

Sorry, I meant capital gains and dividends are currently taxed at only 15%, not interest and dividends.
Sure, lots of people get those, but they should be taxed at 28%

Do you actually believe capital gains & dividends should be taxed @ 28%? You can't be serious.

Ray, your core problem with reality is that the Clinton tax rates worked very well in the 90s. So well that the Republicans had to screw everything up coming back into power in 2001.

They lowered them to 15% in 2003 and then the economy blew up.

Funny that.

bob2356 says

The banks are failing, the banks are failing, the banks are failing. Just chicken little BS to loot the taxpayers.

They were rally failing. The problem with the bailout was that it was executed by Bush-Paulson-Geithner according to the American model (a giveaway to the wealthy), rather than following the Swedish model, which was true nationalization and making the shareholders and management suffer for their misdeeds.

RayAmerica says

Do you actually believe capital gains & dividends should be taxed @ 28%? You can’t be serious.

Even Warren Buffett finds it ridiculous he pays a lower tax rate than his receptionist. It's entirely reasonable.

Troy says

Ray, your core problem with reality is that the Clinton tax rates worked very well in the 90s. So well that the Republicans had to screw everything up coming back into power in 2001.
They lowered them to 15% in 2003 and then the economy blew up.

I think it is overly simplistic to point to Clinton's economy and credit it entirely to his (& Congress's) tax rates. The Clinton & Bush economies had very little in common. For one, and trust me, I'm not defending Bush & the GOP, Clinton benefitted from the end of the Cold War which allowed for huge cuts in the military expenditures. He also transferred much of the welfare entitlement responsibilities onto the states, along with refinancing much of the Federal Gov't debt from safer long term to riskier short term with lower payment structures. Corporate, and personal debt also grew under Clinton, which fueled, IMO, artificially, his so called "miracle economy." All of this, and more, allowed Clinton to have surpluses in I believe 2 of his 8 years in office. Bush on the other hand was a big spender (biggest since LBJ) on social programs and also got us into 2 wars. During Bush’s two terms, homeowners took record amounts of cash out of their equity positions via cash out refinancing, which further fueled his debt driven economy.
Heightened tax rates is not the answer. CUTTING Federal Government spending drastically is the only way for us to get ourselves back on solid footing economically.

Vicente says

Even Warren Buffett finds it ridiculous he pays a lower tax rate than his receptionist. It’s entirely reasonable.

Why is it you people never advocate the reduction of spending and size of the Federal Government?

RayAmerica says

Why is it you people never advocate the reduction of spending and size of the Federal Government?

When you say "you people", I'm assuming you mean those that you call LIBS. And I'm pretty sure that all of those people do advocate a large reduction in military spending.

Why is it you never can remember that?

tatupu70 says

I’m assuming you mean those that you call LIBS. And I’m pretty sure that all of those people do advocate a large reduction in military spending.

I didn't realize that only "military spending" needed to be cut. Amazing that nothing else in the Federal Government is wasteful. Simply amazing.

Nomo .... so what you are saying is that there isn't any room to reduce Federal Government spending outside of the military? How about the interest on the debt? How much taxpayer money does that waste?

RayAmerica says

I didn’t realize that only “military spending” needed to be cut. Amazing that nothing else in the Federal Government is wastful. Simply amazing.

Well, usually it's best to start where you can get the biggest bang for your buck. Since the military is somewhere between 30-50+% of the budget, let's begin there. As Troy has said many times, you'd be cutting a lot of well paying jobs so it will be painful. Probably best to do it slowly over a relatively long time period or to wait until the economy was healthier and could absorb the newly unemployed.

Nomograph says

You start with the biggest source of waste. Do you think we’ll pay down the national debt by eliminating Head Start?

Any thoughts on the hundreds of billions spent on foreign aid every year?

Is money finite or infinite? If the former, the more concentrated the wealth is at the top, the less concentrated it is at the bottom as the pie can only be cut in so many different ways and the governemt shoul ensure that the wealth doesn't become too concentrated at the top at the expense of the masses who have to scramble for the few finite dollars. If the latter, then wealth disparity is nothing to worry about and everyone has the potential to become wealthy with varying levels of sucess depending upon their wealth inheritence, luck, intelligence, dilligence, business savy, power, connections and other personal characteristics.

RayAmerica says

Nomograph says

You start with the biggest source of waste. Do you think we’ll pay down the national debt by eliminating Head Start?

Any thoughts on the hundreds of billions spent on foreign aid every year?

Well--from what I can tell--it looks like the foreign aid budget is ~$40 billion. Not sure where you get hundreds of billions. And a decent chunk of that is financing for military weapons. Israel is the largest recipient too. You want to cut off Israel and military financing? If you say so...

Any thoughts of the $1 trillion + spent on the war in Iraq?

BobbyS says

Any thoughts of the $1 trillion + spent on the war in Iraq?

You mean the war we fought for Israel? Kind of like foreign aid too don't you think?

tatupu70 says

You want to cut off Israel and military financing? If you say so…

It will never happen. The politicians are too afraid of AIPAC. By the way, I'm currently reading a great book on the Neocons, Israel's lobby, etc. called "The Transparent Cabal." Excellent read. Very well documented as to how the Neocons hi-jacked our foreign policy and maneuvered us into these disasterous wars.

Nomograph says

Military spending is probably the most wasteful. Even welfare and food stamps provides a better return by keeping liquor stores and swap meets busy.

http://www.theonion.com/articles/department-of-defense-unveils-83-million-thing-tha,18136/

The problem with socialism is that people don't know what it actually is.

Taxes aren't socialism. Taxes are the alternative to socialism.

tatupu70 says

Well–from what I can tell–it looks like the foreign aid budget is ~$40 billion.

Cutting out that 40 billion for foreign aid stuff should make a big dent in the 1 trillion plus deficit. How about head start? That's another 7 billion. Lord how the money rolls in.

Cut this and that, it will eventially end up being funneled and concentrated to the top.

Kevin says

Taxes are the alternative to socialism.

That's a good one, here's a few more for our loyal party members

Ignorance is Strength
War is Peace
Freedom is Slavery

AdHominem says

Kevin says
Taxes are the alternative to socialism.
That’s a good one, here’s a few more for our loyal party members
Ignorance is Strength
War is Peace
Freedom is Slavery

Really? So, the USSR had high taxes then? And Cuba?

Kevin says

How do you cut the debt? If you don’t make major cuts to at least two of the big three, you can’t cut the deficit. If you can’t cut the deficit you can’t pay down the debt.
Remaining options are inflation (still requires balancing the budget over the long term), taxes, government ownership of industries, or defaulting.
Pick one, see how well it goes.

I just happened to notice that you didn't mention cutting government size and spending as a means to cutting the debt. LOL

RayAmerica says

Kevin says

How do you cut the debt? If you don’t make major cuts to at least two of the big three, you can’t cut the deficit. If you can’t cut the deficit you can’t pay down the debt.

Remaining options are inflation (still requires balancing the budget over the long term), taxes, government ownership of industries, or defaulting.

Pick one, see how well it goes.

I just happened to notice that you didn’t mention cutting government size and spending as a means to cutting the debt. LOL

Other than being the very first fucking thing that I suggested, you're right.

I mean, really. Its not that hard to read.

Really, when it comes down to it the only viable way to cut the deficit through spending cuts is to cut military spending by about two thirds. That means not only ending the wars, it means closing bases and ending the construction of expensive weapons.

The last time that we had a surplus, we had higher tax rates and no big war to pay for.

Now we have two wars, lower tax rates, and a recession that is driving tax revenue even lower.

You could steal from social security and medicare to pay for the military of course. We've been doing that for the last few decades after all. Unfortunately, most people actually like ss and medicare, so good luck trying to cut those.

Its fun to be able to be an armchair budgeter though, isn't it? After all, its so much easier to constantly claim that there are huge buckets of spending that we can reign in and bitch that it isn't being done than it is to actually face reality.

At least the europeans recognized that they needed to pay for their spending, and used either taxes or government ownership of industry (you know, real socialism) to pay for it.

Well, except for greece and spain. They're doing exactly what were doing and pretending like saving money on national parks is going to fix their problems.

The best solution would be to shapeshift into a cockroach. You can be certain your ancestors will live long and prosperous lives for many years to come.

Left leaning democrats, liberals, progressives and socialists put government first and foremost. Apparently they believe government can solve all of societies real and perceived problems. What they conveniently forget is that government doesn't create wealth, it only confiscates it. In other words to provide for some, government must take (by force) from others. Ultimately people become unwilling pawns in the government's game of dominance and control. That doesn't sound like "freedom" does it? Could that be the reason so many Amreicans are so angry now?

BTW, it was recently reported that America is now less free than Britain...the country we fought to obtain our freedom from, UGH.