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Trickle-down economics has become shut your trap economics


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2012 Jan 12, 1:17am   33,207 views  73 comments

by uomo_senza_nome   ➕follow (0)   💰tip   ignore  

http://krugman.blogs.nytimes.com/2012/01/12/be-vewy-vewy-quiet/

One of the commenters:

The most important person who was vewy, vewy quiet about income inequality for a vewy, vewy long time was Barack Obama--at least for the period from June of 2008 until vewy recently. The difference between Romney and Obama is that Obama was vewy, vewy quiet about the subject when it most mattered.
If Romney is elected president it is virtually impossible that he could make a worse pick for his Treasury Secretary than the choice Obama made. Tim Geithner has been whispering in Obama's ear for over three years now about how restored confidence in Wall Street and the big banks will "trickle down" to benefit the rest of the economy.
Obama versus Romney--the one percent versus the one percent.

#politics

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68   Dan8267   2012 Sep 11, 11:55am  


Consider that the vast majority of all wealth in America is inherited and not earned, as proven by Summers and Kotlikoff: http://www.republicansforobama.org/node/9596

From that article:

In other words, the VAST majority of the wealthy in this country are wealthy because they INHERITED their wealth. The vast majority of the wealthy in America haven't "earned" their "success" by hard work. They've inherited it. That doesn't make them successful. It makes them LUCKY.

I would argue that the vast majority of the ancestors who left the wealth didn't earn that wealth but siphoned it from those who produced it. And that's the real tragedy.


If the ultra-fast traders all want to move to England, good riddance. It's not like they produce anything.

The ability to grow an economy is not dependent on capital as the more capital there is in a system, the proportionally it is worth less. Take all the capital out you want of an economy. Whatever capital remains represents 100% of the production of that economy.

It's not the number of currency units in the economy that makes it productive. It's the allocation of those currency units to production, capital goods, and infrastructure that makes an economy more productive. It's all about allocating a certain percentage of whatever capital there is to building robots rather than pizza.

We could burn 90% of the currency in our system. Eliminate literally 90% of all USA dollars. With the remaining 10%, if we allocated just a third of it to increasing productivity rather than consumer goods or playing zero sum games, we could grow our economy faster than it has grown since its inception.

The biggest drag on our economy is allocating wealth to the casinos of Wall Street and the banks. When wealth is allocated to zero-sum gains, the Second Law of Thermodynamics will cause a net decrease in wealth.

I would love to see a pie chart showing how much of our "net worth" is allocated to various things: stocks, bonds, commercial buildings, apartments, houses, highways, office equipment, farm equipment, food, clothing, etc. I suspect a good percentage of our net worth is attributed to zero-sum gambling and a good percentage of our money is chasing more money in zero-sum games. And it is precisely this allocation of wealth to non-productive and non-consumer uses that puts a drag on the economy and hinders both stability and the rate of improvement in the quality of life.

69   freak80   2012 Sep 11, 11:22pm  


I'm pretty confident it would work, and there's no reason not to try.

Let's give it a try! But who will take up the cause? Surely not the Republicans. And probably not the Democrats. Obama has a cozy relationship with the ultra-wealthy elites, as reported by Matt Taibbi.

70   Patrick   2012 Sep 12, 3:14am  

freak80 says

Let's give it a try! But who will take up the cause? Surely not the Republicans. And probably not the Democrats. Obama has a cozy relationship with the ultra-wealthy elites, as reported by Matt Taibbi.

We have to target the people who would come out ahead under a land value tax and inheritance tax.

Fortunately, that's most people! Most people own very little land and inherit pretty much nothing.

But to start with, high-income professionals would probably support the shift to a land value tax because their own income tax rates would be reduced.

71   freak80   2012 Sep 12, 11:38pm  

Just out of curiosity, are there other nations with a similar tax system?

72   American in Japan   2012 Sep 13, 10:58pm  

@Dan8267

>Consider that the vast majority of all wealth in America is inherited and not earned, as proven by Summers and Kotlikoff.

Quiet...don't confuse people with the facts!

@sbourg

>Why don't you fix it in California first? Before hoisting your sem-socialist tactics on the rest of the country? ..."

California's deficit is caused by a mix of "liberal" and "conservative" interests.

conservative interests= the prison industrial complex, "3 strikes and you're out" and all that.

73   deepcgi   2012 Sep 14, 5:10am  

Uh oh here's deepcgi singing the Ron Paul song again...

The disparity between rich and poor growing in magnitude has its basis in fiat currency. Poor people can't leverage their money at 100 to 1 using "supposedly" AAA quality financial instruments. Taxes won't fix it and trickle down doesn't give the little guy any additional leverage.

Both parties are Keynesian. Ron Paul was the only alternative. The most Romney will do is to attempt to make a "cut" in the "increase" in government spending while trying to avoid increasing taxation. The result however will simply be more Keynesian spending, because both Parties believe it's relatively safe as long as the Fed claims it has it all under control.

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