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Disparate Times View Drop Down
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Direct Link To This Post Posted: April 02 2016 at 11:18
^ that's true I will say that a lot of music deals with politics both directly and indirectly.
Songs are like tightly budgeted meals
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Direct Link To This Post Posted: April 02 2016 at 11:05
I am your typical, middle class European social-democrat. A type that most early proggers were. Anyway, I don't think politics should make a difference to us, we are all here because of our love to good music and that is what matters!
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Direct Link To This Post Posted: April 02 2016 at 10:59
I guess not being a Keynesian I'm just trying to accept living in a Keynesian world. I really fear special interest funded politicians trying to manipulate the economy, this seems more problematic to me.
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Direct Link To This Post Posted: April 02 2016 at 10:35
^^^  Certainly just putting people in money's hands is problematic and not what I have in mind.  I am thinking more of capital investment to raise the productive capacity of the economy itself.  This is basically what Keynes envisaged. The whole reason for running fiscal deficits when the economy is in recession was supposed to be because private investment will not flow into a recessionary economy and it is govt which then has to step in to restart the cycle.  Putting money in people's hands through say subsidies and sops without investment will simply let more money chase the same goods and is generally not a great idea indeed.
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Direct Link To This Post Posted: April 02 2016 at 10:01
^ that's a classic response if it doesn't work just spend more if it does see I told you so. When bush gave everybody $600 they said it didn't work as well as it should've because too many just saved the money(myself included) so why not give everybody a prepaid credit card that charges five bucks every month forcing people to spend the money. I think that when the government does the spending it sends false signals the gov won't spend money like the people will if you're gonna stimulate the economy put the power into the people's hands. At least then business has a better idea of what's working.
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Direct Link To This Post Posted: April 01 2016 at 23:35
^^^ In short, I think basically the US stimulus program should have lasted until the economy was in a bit better shape than 2006 (i.e. just before things began to unravel).  Otherwise, the recovery would be anemic, as it seems to have been.
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Direct Link To This Post Posted: March 31 2016 at 13:49
Originally posted by rogerthat rogerthat wrote:

Originally posted by JJLehto JJLehto wrote:

 From all I gather, the counter to deficits in the long run is: With a stronger economy deficits naturally fall/are lessened so it pays for itself to a large extent. I know this is highly unorthodox even among liberals today. 



As long as the economy continues to boom.  The key being that deficits by themselves cannot keep the economy booming beyond a point, cannot make it immune to the impact of global developments.  India never reduced deficits as much as it did between 2003-2007, also the years when it grew the fastest for a sustained period of time.  Revenue deficit was near zero and fiscal deficit around 2% by 2007.  In other words, growth financing deficits and reducing them, as you described. 

But when the Financial Crisis of 2008 struck, it did impact India, albeit not as much as the US or Europe, so more fiscal expansion was called for.  Which led to high inflation in a few years.  I think the key then is to look at the deficit in absolute terms instead of as a percentage of GDP.  If the economy starts growing at a fast clip, there may not be a requirement to maintain deficit at the same ratio to GDP.  A moderate increase in deficit (in absolute terms) but which is lower in percentage terms than the previous year may better serve the purpose of keeping growth going without leading to high inflation.  

Yeah I wouldnt want it to run a high level for a very long period of time, as you know the deficit fell every year (a little bit at first, much more after the tax hikes/spending cuts a few years ago) after spiking very high in 2009, and there was never any inflationary worry so seems that is correct. 

Like I mentioned I'm not into stimulus packages, and I do think a very large long one (one enough to be effective to spur strong recovery) is dangerous. The US's only lasted for 2 years and really was enough to just dampen the fire, but was it worth going more? From what I know both China and Australia are paying now for their stimulii actions. I prefer jobs programs and gov investment, I liken it to keeping a car engine well oiled and maintained, opposed to letting it go for years than trying to fix the much worse mess. 

Way I see it, under Bush we had very low taxes, fairly high gov spending with no change in either (there were neither revenue increases nor spending cuts) and the deficit fell, and there was never any major inflation pressure. So I figure, a growing economy can handle it, especially if the growth is strong, it'll reduce the deficits even greater than mass military spending which isn't super helpful in my book


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Direct Link To This Post Posted: March 28 2016 at 20:59
it is meme time again
http://i.imgur.com/y1Lkju6.png

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Direct Link To This Post Posted: March 27 2016 at 02:55
Originally posted by JJLehto JJLehto wrote:

 From all I gather, the counter to deficits in the long run is: With a stronger economy deficits naturally fall/are lessened so it pays for itself to a large extent. I know this is highly unorthodox even among liberals today. 



As long as the economy continues to boom.  The key being that deficits by themselves cannot keep the economy booming beyond a point, cannot make it immune to the impact of global developments.  India never reduced deficits as much as it did between 2003-2007, also the years when it grew the fastest for a sustained period of time.  Revenue deficit was near zero and fiscal deficit around 2% by 2007.  In other words, growth financing deficits and reducing them, as you described. 

But when the Financial Crisis of 2008 struck, it did impact India, albeit not as much as the US or Europe, so more fiscal expansion was called for.  Which led to high inflation in a few years.  I think the key then is to look at the deficit in absolute terms instead of as a percentage of GDP.  If the economy starts growing at a fast clip, there may not be a requirement to maintain deficit at the same ratio to GDP.  A moderate increase in deficit (in absolute terms) but which is lower in percentage terms than the previous year may better serve the purpose of keeping growth going without leading to high inflation.  


Edited by rogerthat - March 27 2016 at 02:56
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Direct Link To This Post Posted: March 27 2016 at 02:25
Originally posted by dr wu23 dr wu23 wrote:

How is a higher tax rate punishing those  who can afford to pay more...? As it is the rich have multiple ways to avoid paying their fair share currently , while the majority of tax is on the backs of the middle class.
That's completely unfair and has been for many decades now.
That is what needs to be addressed whomever gets into office.


Yup. 
It's actually why, though I feel things should be done to correct this, the focus of the left should change from taxing the rich to instead boosting spending...trickle up vs trying to tax and spend. 

And I do have to say, the punish success line, I do think it's always been a weak argument. Someone in NYC makes $10 mill a year, lets say a 50% tax rate, add state and local, we're at 63%. A lot of tax, but still would leave them with 3.7 million for that year, which is more than many Americans will make in their lifetime, in one year.... I do find it hard to say this is punishing success. 

Especially when you take into account loopholes, deductions, creative accounting and stashing it offshore.
I knew someone in college who boasted how his family stashed their cash in the Cayman Islands I believe, so they dodge the taxes and were "poor" thus getting gov aid. AngryCry he raged against Obama's election and I was like, why do you even care? The 4.6% tax increase was never gunna impact him anyway with the $ being hidden.... (His father also put alot of $ into a "charity" involving churches in Haiti or something but it was a scam and actually they ripped off locals through it) Was very sick...


Edited by JJLehto - March 27 2016 at 02:30
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Direct Link To This Post Posted: March 27 2016 at 02:16
Eh, many Americans do pay little tax. Lower earners I believe are mainly faced with sales taxes and the FICA tax. While the middle and upper middle, even affluent may pay too much...the super rich certainly don't and we gotta remember: cutting taxes just hasn't really lead to growth. They just hoard the money. Way I see it is this:

1: An employer needs jobs to do. Coddle and cut taxes, but if there's simply no work to be done, they wont hire. 
2: Wealthy people/households save more and more as they get tax cuts. Lets say they buy Ferraris and yachts and 3 houses, not saying this doesnt help the economy but this isn't super stimulative, especially since Ferrari's are made in ItalyLOL Rich people obviously won't go spending thousands, or millions, more on essentials...and there's also fewer wealthy. I just see no realistic way how tax cuts at top can do much. 
3: Investing. I dont know about this, again reality doesn't seem to bare it out and if anything maybe lower taxes encourages wreckless behavior? With so much $ why not toss a bunch into speculation to make tons more!  At 50% tax though, may be a lot more careful. 
Those are some of the typical arguments for tax cuts and none of them really appeal to me. 

There's also political issues to keep in mind and like what was discussed above, tooooo much $ concentration can lead to economic issues like sluggish growth, instability etc  

Oh, also an idea rarely discussed is the theory that higher taxes on top don't really lead to more redistribution per se, (taking and spending) but that you are less likely to pay yourself 10 mill a year if 70% goes to taxes. So lower earnings to avoid higher taxes, and that $ must go somewhere...invested back into the company. Higher wages, investments internal and external etc  I mean, top earnings were far lower in the post WWII days, they started to soar in the 80s. Cant be a coincidence lower taxes correlates with higher pay, and again that $ comes from somewhere, which is the rest of the company/economy.  
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Direct Link To This Post Posted: March 27 2016 at 02:07
Originally posted by rogerthat rogerthat wrote:

Keynes said govts should run deficits during recessions and run a tight ship during booms.  Basically smooth out the cycle.  He never said govts should keep expanding deficits to pursue full employment, that was heterodox policy, just like QE.  As you say, the monetarists and fiscal conservatives saw a golden opportunity to put the knife in the 70s and ran with it.  But at what price?

Well that was the battle:
Was Keynes simply suggesting the short run processes you mention, without drastic change to the orthodox, or did he want to take a hammer to the orthodox and make serious, fundamental changes? 
I guess it may not matter too much what he felt, why try to interpret and find real intent and etc in Keynes and what he may have meant? Regardless of his beliefs, a school of thought has indeed developed and expanded based on the latter interpretation, with his work as the foundation of course. 

I have drifted towards the latter, it took me a long time. It was just too shocking to hear things like "can run full(er) employment without inflation". From all I gather, the counter to deficits in the long run is: With a stronger economy deficits naturally fall/are lessened so it pays for itself to a large extent. I know this is highly unorthodox even among liberals today. 



 
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Direct Link To This Post Posted: March 26 2016 at 22:22
Originally posted by dr wu23 dr wu23 wrote:

How is a higher tax rate punishing those  who can afford to pay more...? As it is the rich have multiple ways to avoid paying their fair share currently , while the majority of tax is on the backs of the middle class.
That's completely unfair and has been for many decades now.
That is what needs to be addressed whomever gets into office.


Not to mention indirect tax (sales tax and the like, to be clear) disproportionately affects the low and middle income groups compared to the rich.  In focusing on only direct tax, we miss out what a big chunk of revenue indirect tax is.  
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Direct Link To This Post Posted: March 26 2016 at 12:21
I agree the current system is completely unfair. Like I said if we all paid the same % that would be fair.
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Direct Link To This Post Posted: March 26 2016 at 12:13
How is a higher tax rate punishing those  who can afford to pay more...? As it is the rich have multiple ways to avoid paying their fair share currently , while the majority of tax is on the backs of the middle class.
That's completely unfair and has been for many decades now.
That is what needs to be addressed whomever gets into office.

One does nothing yet nothing is left undone.
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Direct Link To This Post Posted: March 26 2016 at 12:06
Originally posted by Disparate Times Disparate Times wrote:

I still am not sold on negative incentives. The idea of punishing those who do well is bad incentive. Though punishing those who don't do so well isn't ok either. Progressively taxing the rich could easily lead to less investment and less employment. I'm all for everyone paying the same %, but with the proper cuts to wasteful spending infrastructure would still be easy to afford.

Only if we are talking about hiking corp tax.  That's not on the table anyway.  Higher tax on personal income, esp income from return on investment, will not affect investment unless it brings down consumption significantly.  And that is not going to happen in a scenario where a huge proportion of the wealth is concentrated in the hands of a very small minority of the population.  That scenario describes the situation in not only US but many, many countries across the world today.  
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Direct Link To This Post Posted: March 26 2016 at 11:59
I still am not sold on negative incentives. The idea of punishing those who do well is bad incentive. Though punishing those who don't do so well isn't ok either. Progressively taxing the rich could easily lead to less investment and less employment. I'm all for everyone paying the same %, but with the proper cuts to wasteful spending infrastructure would still be easy to afford.
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Direct Link To This Post Posted: March 26 2016 at 11:04
Originally posted by Disparate Times Disparate Times wrote:

I think citizens would be happier if the govt would stop taxing their income, putting more money in their pockets should stimulate the economy. No one spends someone else's money as well as they would spend their own.
Wink
No taxes on low income earners, yes.  Lower taxes on middle income, yes.  But once you get to the rich, they run out of things that money can buy and they start to save and invest.  Which is why we have the unique spectacle of a never ending bull run in the stock markets in US with an at best anemic recovery in the real economy.  All the money Ben & co pumped in through QE just zipped straight into the bourses; had monetary and fiscal policy been in lock step, it would have had a greater impact on consumption than it has.  So, getting back to the point, tax progressively higher income levels at higher tax rates so that govt still has money to spend on the infrastructure that the economy needs, without hurting consumption at the macro level.
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Direct Link To This Post Posted: March 26 2016 at 09:05
I think citizens would be happier if the govt would stop taxing their income, putting more money in their pockets should stimulate the economy. No one spends someone else's money as well as they would spend their own.
Wink
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Direct Link To This Post Posted: March 26 2016 at 02:36
Keynes said govts should run deficits during recessions and run a tight ship during booms.  Basically smooth out the cycle.  He never said govts should keep expanding deficits to pursue full employment, that was heterodox policy, just like QE.  As you say, the monetarists and fiscal conservatives saw a golden opportunity to put the knife in the 70s and ran with it.  But at what price?
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