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JJLehto 
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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 Posted: March 27 2016 at 02:25 |
 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.
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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.   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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rogerthat
Prog Reviewer
Joined: September 03 2006
Location: .
Status: Offline
Points: 9869
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Posted: March 27 2016 at 02:55 |
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.
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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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A Person
Forum Senior Member
Joined: November 10 2008
Location: __
Status: Offline
Points: 65760
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Posted: March 28 2016 at 20:59 |
it is meme time again 
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: March 31 2016 at 13:49 |
rogerthat wrote:
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.
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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.
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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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rogerthat
Prog Reviewer
Joined: September 03 2006
Location: .
Status: Offline
Points: 9869
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Posted: April 01 2016 at 23:35 |
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^^^ 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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Disparate Times
Forum Senior Member
Joined: July 12 2015
Location: Rust belt
Status: Offline
Points: 261
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Posted: April 02 2016 at 10:01 |
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^ 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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Songs are like tightly budgeted meals
Nobodies doing anything new or even real
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rogerthat
Prog Reviewer
Joined: September 03 2006
Location: .
Status: Offline
Points: 9869
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Posted: April 02 2016 at 10:35 |
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^^^ 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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Disparate Times
Forum Senior Member
Joined: July 12 2015
Location: Rust belt
Status: Offline
Points: 261
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Posted: April 02 2016 at 10:59 |
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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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Songs are like tightly budgeted meals
Nobodies doing anything new or even real
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ALotOfBottle
Prog Reviewer
Joined: February 17 2016
Location: Lublin, Poland
Status: Offline
Points: 1990
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Posted: April 02 2016 at 11:05 |
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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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Disparate Times
Forum Senior Member
Joined: July 12 2015
Location: Rust belt
Status: Offline
Points: 261
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Posted: April 02 2016 at 11:18 |
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^ that's true I will say that a lot of music deals with politics both directly and indirectly.
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Songs are like tightly budgeted meals
Nobodies doing anything new or even real
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: April 02 2016 at 12:57 |
ALotOfBottle wrote:
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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Oh yeah, but ya know fun to discuss other things, and I did grow tired of talking music after awhile, especially when so much of it was the same stuff over and over (many many years on the forum will do that  )
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Disparate Times
Forum Senior Member
Joined: July 12 2015
Location: Rust belt
Status: Offline
Points: 261
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Posted: April 02 2016 at 13:00 |
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^ what you got nothing more to add to wakeman v Emerson or Howe v Hackett yes v Genesis? Haha
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Songs are like tightly budgeted meals
Nobodies doing anything new or even real
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: April 02 2016 at 13:10 |
Disparate Times wrote:
^ 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. |
To me it's not HOW much, but how it's spent. The reason the stimulus (Obama's) wasn't super effective was because despite the large amount of $ over half of it went to tax relief (people often dont know/fail to mention this one ) and aid to state and local budgets.
This is helpful, but it's not very stimulative. It was more like throwing a bucket on a forest fire, or putting a band aid on an axe wound . Of course there was the infrastructure investment, which economists and business people left right and center all agree is good, but this wasn't a massive amount, and it's longer term pay off (so people just saw a whole lot of $ and not much result).
As for the Bush stimulus bill, well just giving people a few hundred bucks isn't really gunna do much, but you're right most saved it. This is where mainstream economics misses the target: They ignore private debt. The US was drowning in various debts by 2008, so of course people were gunna save their $ again this is helpful, but not a stimulus.
So I wouldn't say spend more, but spend wiser. While it was bold of Obama to use direct gov stimulus, bucking 30 years of orthodox, he should've done it better (more direct, longer term, more job creation) made it 2 bills, something.
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: April 02 2016 at 13:11 |
Disparate Times wrote:
^ what you got nothing more to add to wakeman v Emerson or Howe v Hackett yes v Genesis? Haha |
Been here since 2006 as ya see, many of the debates/discussion that I was tired of in 2 years are still going today
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Disparate Times
Forum Senior Member
Joined: July 12 2015
Location: Rust belt
Status: Offline
Points: 261
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Posted: April 02 2016 at 13:20 |
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How it was spent is what I mean by politicians making the choices. As for saving I've heard the argument that when people save it sends a message to the market that their not providing or properly producing goods that consumers want so it's up to them to change.
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Songs are like tightly budgeted meals
Nobodies doing anything new or even real
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: April 02 2016 at 13:37 |
rogerthat wrote:
^^^ 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. |
Thing is, if you believe like I do that there are some deep structural (opposed to just cyclical) issues the need for a longer, more new deal like program could be in order. I think of this as more than just a stimulus. But yeah, the stimulus itself wasn't super effective and not very long lasting. Also just a couple of years after that spending ended the US pursued, mild, austerity, so not only did it run out too soon, we reversed course Good thing it was only light austerity
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: April 02 2016 at 13:50 |
Disparate Times wrote:
How it was spent is what I mean by politicians making the choices. As for saving I've heard the argument that when people save it sends a message to the market that their not providing or properly producing goods that consumers want so it's up to them to change. |
Well that's fair. I just say because of the private debt situation (btw far worse than it was during the great depression) it should be understood by policymakers/economists that any $ given to people will go to saving. For stimulation, the gov will need to spend it, but that is fair..people saving does send that message...that the markets are not working very well (aka people are taking on way too much debt/the wall st big wigs are pushing too much debt)
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Disparate Times
Forum Senior Member
Joined: July 12 2015
Location: Rust belt
Status: Offline
Points: 261
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Posted: April 02 2016 at 14:15 |
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I suppose what scares me the most is the faith that people put into the gov when it's obvious how corrupt they are. I also wonder if too many economists think of economics as purely a science that can be cured with the right formula so to speak. Things like emergent order are almost impossible to predict, not to mention unforeseen policies that can be game changers. Of coarse I'm not foolish enough to think that a freer market will absolve all of our problems I worry that the same greed that drives innovation could just as easily lead to the collapse of a middle class, some may say it already is.
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Songs are like tightly budgeted meals
Nobodies doing anything new or even real
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A Person
Forum Senior Member
Joined: November 10 2008
Location: __
Status: Offline
Points: 65760
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Posted: April 02 2016 at 15:22 |
Disparate Times wrote:
greed that drives innovation |
I have never understood this concept.
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JJLehto
Prog Reviewer
Joined: April 05 2006
Location: Tallahassee, FL
Status: Offline
Points: 34550
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Posted: April 02 2016 at 15:32 |
Disparate Times wrote:
I suppose what scares me the most is the faith that people put into the gov when it's obvious how corrupt they are. I also wonder if too many economists think of economics as purely a science that can be cured with the right formula so to speak. Things like emergent order are almost impossible to predict, not to mention unforeseen policies that can be game changers. Of coarse I'm not foolish enough to think that a freer market will absolve all of our problems I worry that the same greed that drives innovation could just as easily lead to the collapse of a middle class, some may say it already is. |
Yeah but the alternative I see as no better and hate to say, I see lots of corruption, crony capitalism, regulatory capture, etc etc etc seems to have grown with the rise of lesser government/more pro market policies. Oh well mainstream economist's do see it as a hard science, and I think that is very very problematic, especially since many of the models used and theories are pretty unrealistic, to be polite Likewise I am not foolish enough to think gov can solve everything, but I don't want some centralized planning and all this tinkering, stimulii packages that right and left love and various strategies. I just say, put people to work directly doing useful stuff.
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