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Stop Coddling the Super-Rich

caltrek2

GROUP: Members

POSTS: 2654

Report this Sep. 03 2011, 9:54 am

Quote: Vicsage @ Sep. 03 2011, 9:01 am

>

>Problem is if you look at medicare.  Wateful.  Keeping older nonproductive people alive.  If we want to do the efficiency thing, it only makes sense to stop taking care of the old.  I do not support this, but fiscally its probably the best move we can make.  Cuts down medical costs, social security payments, services to aid the old, and dehumanizes americans even more.  Nearly  every significant cut will hurt some large group of people.  What americans have to ask themselves is,  How is america different today then it was 50 or 60 years ago, when the problem wasn't as severe?   Smaller population.  Lower percentage of older people.  Less services.  America was the leading country in most manufacturing jobs.  Less regulation.  Less free trade agreements.  Stronger private sector unions.  Maybe we should see which of these things (among others, I'm sure)  might be useful or practical today.  I think we've reached a tipping point and there is nothing that will work.  We're going to crash, the question is how fast?

>


I get the feeling some of your fear comes from an accounting problem. Consider Yanks post:


"Oh jesus, they have 2 TRILLION a year!!!"


...and his previous post to that:


"Spending is the problem, not revenues."


Now notice that he did not say "too much spending is the problem". He just said spending is the problem. So when I yanked his chain a little he responded  with a post indicating that he meant too much spending.


An accounting problem. What is "too much"?


Look at how the private sector operates: A "need" or desire for a product is identified (or produced through an advertising effort). The product or service is produced or provided. So far pretty basis.


A certain number of people are employed to produce the product or provide the service. The capitalist in charge, perhaps with the help of some engineers (s)he has hired, figures out a more efficient way to provide the products or service. A lesser number of people are needed to produce the same amount of goods and services. Productivity increases. The individual capitalist gains relative to his competitors. At a higher level something very interesting can be seen as happening. Formerly employed individuals are now out of work. Being out of work, they pull in their belts and reduce their expenditures. With a little luck they find another job, but that job may not pay as much, so even then they still reduce their expenditures. Result, fewer customers. Less demand. A recession.


So the individual capitalist acting at his (or her) own level does something very rational. Yet, negative consequences to society results.  All capitalists suffer because there is less of a demand for goods and services.


So perhaps we shouldn't be thinking in terms of wishing that our grandparents and parents should die sooner so that we can inherit their wealth before it is eaten up by medical bills. Perhaps instead, we should shift our collective resources around so that the newly enhanced productivity is enjoyed by everyone, including the elderly - now more in need of medical attention than when they were younger.


The accounting problem I mentioned?


How to best "shift" our freed up resources. How to make sure that increasing productivity does not result in increased unemployment as opposed to greater overall wealth.  


As Americans, we sometimes suffer from too much pluribus and not enough unum. - Arthur Schelsinger, Jr.

Vicsage

GROUP: Members

POSTS: 465

Report this Sep. 03 2011, 10:30 am

So how does one make sure that increasing productivity does not result in increased unemployment as opposed  to greater overall wealth?  Stop increasing productivity?  That's not likely.  Take some of the money the capitalist made and give it to people (either through welfare or government jobs that are probably not needed).  And if you take too much, you stifle innovation.  Why spend money on a possible improvement of productivity,  when the return will be too small?  It seems everyone kind of knows what has to be done, but when it comes to specifics, we all seem to freeze.  We seem to know that whatever action we take has consequences that may take us from the frying pan into the fire.  I don't really see a viable solution.  Human nature is such that if you can get by without working hard you will.  And for most, if getting rich means putting a few people out of work, they will.  

caltrek2

GROUP: Members

POSTS: 2654

Report this Sep. 05 2011, 7:36 am

Quote: Vicsage @ Sep. 03 2011, 10:30 am

>

>So how does one make sure that increasing productivity does not result in increased unemployment as opposed  to greater overall wealth?  Stop increasing productivity?  That's not likely.  Take some of the money the capitalist made and give it to people (either through welfare or government jobs that are probably not needed).  And if you take too much, you stifle innovation.  Why spend money on a possible improvement of productivity,  when the return will be too small?  It seems everyone kind of knows what has to be done, but when it comes to specifics, we all seem to freeze.  We seem to know that whatever action we take has consequences that may take us from the frying pan into the fire.  I don't really see a viable solution.  Human nature is such that if you can get by without working hard you will.  And for most, if getting rich means putting a few people out of work, they will.  

>


Actually, I think you pointed to one possible solution in your own post:


"Take some of the money the capitalist made and give it to people (either through welfare or government jobs that are probably not needed).  And if you take too much, you stifle innovation."


Partly why you missed highlighting the right answer is because of your qualifier about jobs that "are probably not needed". You also correctly point out that if too much is taxed from the rich "you stifle innovation".


So lets look at the situation where productiviyty has increased but aggregate demand has slowed down. Classic conservative doctrine is that if you increase taxes for the rich in such situations, investment will be adversely affected because the rich will have less to invest. Yet, if there is insufficient aggregate demand within the U.S., invostors will not want to invest more money here anyway. Why hire more workers to produce more poducts when people cannot afford those products in the first place?


Capitalists need two things to allow for job creating investment:


1) To have on hand the money to invest.


2)  To have a viable market for the products they produce and the services they provide.


If they only have the first, and not the second, they will not invest.


So, in that situation, you can raise taxes, increase government spending, increase aggregate demand and encourage private sector investment. Now, if the situation is that there is not sufficient capacity in the market place to meet demand, then it makes sense to reduce taxes on corporate income and capital gains. That will allow more investment in production.


So it is not a one size fits all situation. Unfortunately, many Tea Party type conservatives simply don't understand that aspect of economic theory. Moreover, corporations and their CEOs want there taxes decreased in all sitatuions in order to increae their profit margin and after tax compensation. In some cases this is appropriate, in other cases it is simply not needed.


So politically we end up with a coalition of the greedy and the ignorant to promote bad economic policy. Oh well, nothing in life is perfect. 


As Americans, we sometimes suffer from too much pluribus and not enough unum. - Arthur Schelsinger, Jr.

FleetAdmiral_BamBam

GROUP: Members

POSTS: 46330

Report this Sep. 05 2011, 11:12 am

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>Ahhh...so that is what the debate is about. Not how to balance the budget, but how to avoid taxes by making others pay more. A game that  U.S. based corporations and rich folk like Warren Buffett play all too well.

>Answer provided by politicians: Cut everybody's taxes, but don't cut expenditures. Then when deficits reach a record high while unemployment spikes upward, blame the other party. Brilliant strategy for the United States of amnesia.

>

Spending is the problem, not revenues...

Only if you are an anarchist.

????

If you don't have revenues, then how can you have a government?

Oh jesus, they have 2 TRILLION a year!!!

Which is WAY TOO MUCH!!!


I don't think any of us want to kill off all revenues to the government - we just want to get back to a small, Constitutional government that spends very little of the GDP (historically about 3% before the ProRegressive movement.)  The bigger the government, the less liberty.


FleetAdmiral_BamBam

GROUP: Members

POSTS: 46330

Report this Sep. 05 2011, 11:17 am

Quote: caltrek2 @ Sep. 05 2011, 7:36 am

>So it is not a one size fits all situation. Unfortunately, many Tea Party type conservatives simply don't understand that aspect of economic theory. Moreover, corporations and their CEOs want there taxes decreased in all sitatuions in order to increae their profit margin and after tax compensation. In some cases this is appropriate, in other cases it is simply not needed.

>So politically we end up with a coalition of the greedy and the ignorant to promote bad economic policy. Oh well, nothing in life is perfect. 

>
Actually, many of us study banking and finance and economics.  We also study history and see that the move the government takes, the less businesses have to invest.  And the more regulations the government imposes, the more expensive and harder it is to do business.


For the most part, government needs to stop being so arrogant and get out of the way so people can produce.  There is a need for a SMALL government to protect our liberties, but not to control us.


caltrek2

GROUP: Members

POSTS: 2654

Report this Sep. 05 2011, 11:44 am

Quote: FleetAdmiral_BamBam @ Sep. 05 2011, 11:17 am

Quote: caltrek2 @ Sep. 05 2011, 7:36 am

>

>So it is not a one size fits all situation. Unfortunately, many Tea Party type conservatives simply don't understand that aspect of economic theory. Moreover, corporations and their CEOs want there taxes decreased in all situations in order to increae their profit margin and after tax compensation. In some cases this is appropriate, in other cases it is simply not needed.

>So politically we end up with a coalition of the greedy and the ignorant to promote bad economic policy. Oh well, nothing in life is perfect. 

>
Actually, many of us study banking and finance and economics.  We also study history and see that the move the government takes, the less businesses have to invest.  And the more regulations the government imposes, the more expensive and harder it is to do business.

For the most part, government needs to stop being so arrogant and get out of the way so people can produce.  There is a need for a SMALL government to protect our liberties, but not to control us.


As long as there is a need for any government, then there is the question of how should that government's activities should be paid.


1) It can print money, leading to inflation.


2) It can tax, which may or may not adversely affect the domestic economy, depending upon circumstances, type of taxation, etc.


3) It can charge fees for direct service, as in the case of a government owned utility.


3) It can borrow.


Regulation is a separate issue. Primary criteria should be does regulation protect the health and safety of the general population - thus the need for environmental regulation. Does it promote fair business practices - thus the need for consumer protection.


As Americans, we sometimes suffer from too much pluribus and not enough unum. - Arthur Schelsinger, Jr.

FleetAdmiral_BamBam

GROUP: Members

POSTS: 46330

Report this Sep. 05 2011, 11:52 am

^^ Considering that Congress abdicated their Constitutional responsibility of coining money a long time ago.


And printing money out of thin air is extremely stupid - when I learned about fiat, it proved how people could manipulate currency for their gain.


Regulation is definitely linked as it is harming business.  For every law that has been passed, there are hundreds, and sometimes thousands of pages of additional regulation.  And with each regulation, government must grow.


chr33355

GROUP: Members

POSTS: 1551

Report this Sep. 07 2011, 3:45 pm

Quote: caltrek2 @ Sep. 03 2011, 9:54 am

Quote: Vicsage @ Sep. 03 2011, 9:01 am

>

>

>Problem is if you look at medicare.  Wateful.  Keeping older nonproductive people alive.  If we want to do the efficiency thing, it only makes sense to stop taking care of the old.  I do not support this, but fiscally its probably the best move we can make.  Cuts down medical costs, social security payments, services to aid the old, and dehumanizes americans even more.  Nearly  every significant cut will hurt some large group of people.  What americans have to ask themselves is,  How is america different today then it was 50 or 60 years ago, when the problem wasn't as severe?   Smaller population.  Lower percentage of older people.  Less services.  America was the leading country in most manufacturing jobs.  Less regulation.  Less free trade agreements.  Stronger private sector unions.  Maybe we should see which of these things (among others, I'm sure)  might be useful or practical today.  I think we've reached a tipping point and there is nothing that will work.  We're going to crash, the question is how fast?

>

I get the feeling some of your fear comes from an accounting problem. Consider Yanks post:

"Oh jesus, they have 2 TRILLION a year!!!"

...and his previous post to that:

"Spending is the problem, not revenues."

Now notice that he did not say "too much spending is the problem". He just said spending is the problem. So when I yanked his chain a little he responded  with a post indicating that he meant too much spending.

An accounting problem. What is "too much"?

Look at how the private sector operates: A "need" or desire for a product is identified (or produced through an advertising effort). The product or service is produced or provided. So far pretty basis.

A certain number of people are employed to produce the product or provide the service. The capitalist in charge, perhaps with the help of some engineers (s)he has hired, figures out a more efficient way to provide the products or service. A lesser number of people are needed to produce the same amount of goods and services. Productivity increases. The individual capitalist gains relative to his competitors. At a higher level something very interesting can be seen as happening. Formerly employed individuals are now out of work. Being out of work, they pull in their belts and reduce their expenditures. With a little luck they find another job, but that job may not pay as much, so even then they still reduce their expenditures. Result, fewer customers. Less demand. A recession. There is a flaw with your example usually when an indivdual captials discovers some improvement to effecncy he/she uses the opportuinity to grow NOT to say where they are.  Since they are growing they need to hire more workers not lay off some.

So the individual capitalist acting at his (or her) own level does something very rational. Yet, negative consequences to society results.  All capitalists suffer because there is less of a demand for goods and services.

So perhaps we shouldn't be thinking in terms of wishing that our grandparents and parents should die sooner so that we can inherit their wealth before it is eaten up by medical bills. Perhaps instead, we should shift our collective resources around so that the newly enhanced productivity is enjoyed by everyone, including the elderly - now more in need of medical attention than when they were younger.

The accounting problem I mentioned?

How to best "shift" our freed up resources. How to make sure that increasing productivity does not result in increased unemployment as opposed to greater overall wealth.  


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