The destruction of the US middle class 101 [Archive]

Segnosaur

2nd June 2003, 04:01 PM

Are you by chance referring to Bush and his policies? Or just in general. Given the general attitudes on this board, I'm going to assume you are refering to the policies of the current US administration...

Originally posted by jj
How to destroy a middle class:

1) Tax them more heavily than the upper classes.

What evidence do you have of this? Although in terms of overall dollars the rich will benefit from the tax cuts, the middle class still has a lower marginal tax rate. So, the middle class usually pays less in tax both in terms of total dollar value, and as a percentage of their income.

Originally posted by jj

2) Manipulate the economy to cause massive inflation, thereby destroying their savings every 30 years.

9) Even more inflation, in the name of stimulating the economy, ensuring the slavehood of the people who voted you in.

Is this something the government is doing right now? because if it is, they're failing at it badly.

And how exactly do you define 'massive'? Some inflation is necessary to allow wages and prices to balance themselves out.

Originally posted by jj

3) Allow the rich to skim profits now against company futures, destroying job after job.

What exactly are you referring to?

Originally posted by jj

4) Get rid of corporate research, destroying job after job, as well as causing inflation due to loss of efficiency and loss of innovation.

How exactly does the government get rid of corporate research? Its up to the companies to decide for themselves what they want to invest.

Although the government can do some work to help (e.g. tax credits for research), they should not have a direct hand in things.

Originally posted by jj

5) Have economic stagnation without inflation for a while, because of the stop to innovation and the loss of jobs.

Its called 'economic cycles'... the economy goes well for a while, looses steam, and then goes well for a while.

Originally posted by jj

6) Build a massive federal deficit by having wars.

Guess what? Canada had massive debts for years, despite not fighting major conflicts and having a near-worthless military. Deficits can be caused by any type of government spending, not just military.

Also, 'war' is often useful in providing stability. (A reduction in terrorist threats encourages tourism; the invasion of Iraq should reduce oil prices in the long term by increasing world supply, etc.)

Originally posted by jj

7) Allow the currency to drop to wish away the deficit, causing even more inflation.

There is very little that can be done to control the price of currency. Also, currency is measured relative to other currencies. (So, a rise in the Euro may be seen as a drop in the value of the US dollar, even though nothing fundamental has changed in the US economy.)

The only direct ways that I know of to increase the value of a currency are:
- Buy back Dollars on the foreign markets (but that can only be done for a limited time)
- Increase interest rates (but that can slow economic growth)
- Reduce the M1 money supply, for example by taking money out of circulation

Originally posted by jj

8) Get the very people who you are destroying the worst, those in the lower parts of the middle class, the common, important, basic worker who without which there is no economy but who can not afford to "oversave" to protect themselves, to vote you in by taking advantage of the corrupted educational system and inciting panic.

Well, thank goodness you're here to help us all see the light... After all, only you know anything about the economy.

Malachi151

2nd June 2003, 04:13 PM

What evidence do you have of this? Although in terms of overall dollars the rich will benefit from the tax cuts, the middle class still has a lower marginal tax rate. So, the middle class usually pays less in tax both in terms of total dollar value, and as a percentage of their income.

Not really. When you add in sales taxes and such the poor and middle pay a higher percentage, at least that will be true now that capital gains is being done the way Bush is doing it.

2nd June 2003, 05:12 PM

Originally posted by Segnosaur
Are you by chance referring to Bush and his policies? Or just in general. Given the general attitudes on this board, I'm going to assume you are refering to the policies of the current US administration...

Translation: Let's just make up a straw man and argue against it, because this guy has our number but good and we really don't want people to notice!

Now, in reality, were you alive in the 1970's? That is exactly what the Nixon/Agnew bunch did to the people then. Ever hear of "stagflation"? We got that way JUST the same way that shrub is heading us now. Care to deal with the facts instead of your straw man?

What evidence do you have of this? Although in terms of overall dollars the rich will benefit from the tax cuts, the middle class still has a lower marginal tax rate. So, the middle class usually pays less in tax both in terms of total dollar value, and as a percentage of their income.

Malachi already answered this.

Is this something the government is doing right now? because if it is, they're failing at it badly.

And how exactly do you define 'massive'? Some inflation is necessary to allow wages and prices to balance themselves out.

See 1973 to 1985, give or take, for a historical example.

What exactly are you referring to?

History. You should study it.

How exactly does the government get rid of corporate research? Its up to the companies to decide for themselves what they want to invest.

Quack, quack...

Although the government can do some work to help (e.g. tax credits for research), they should not have a direct hand in things.

Present tax policies massively discourage research. It's not regarded as an investment, but rather as something that comes out of cash after taxes.

Its called 'economic cycles'... the economy goes well for a while, looses steam, and then goes well for a while.

Like Brazil, Argentina, Wiemar Germany, and so on? Sometimes things recover. World history would suggest more often not.

Guess what? Canada had massive debts for years, despite not fighting major conflicts and having a near-worthless military. Deficits can be caused by any type of government spending, not just military.

So what? I agree entirely, but you're supporting me here. There are a myriad number of ways to mess up, we all know that.

Also, 'war' is often useful in providing stability. (A reduction in terrorist threats encourages tourism; the invasion of Iraq should reduce oil prices in the long term by increasing world supply, etc.)

At the cost of massive debt, that can only be inflated away unless the economy is in a massive growth period. Why do you think Shrub is letting the dollar crash? He has to, that will push up external prices, allowing INTERNAL prices to rise.

There is very little that can be done to control the price of currency. Also, currency is measured relative to other currencies.
Really? Then how come the dollar started to drop when the US stopped supporting the price? That would rather counter the idea of "very little". Sorry, good myth, but no go. You are right in some sense, that is how it OUGHT to work. But like many things in this world, nope.

Well, thank goodness you're here to help us all see the light... After all, only you know anything about the economy.
Why thank you for putting words in my mouth. Nixon did it by accident and now Shrub is doing it. Accident? Who knows? Unlike you, who tells me what I mean instead of asking, I don't even try to read minds.

I suggest that before you continue on your dismissal, you study a bit of history, and look at the stock market in the late 1960's (like now, low inflation, etc) and then into the 70's and 80's.

Same deal. Deficit taking away the money that business needs. Inflation due to weakening currency. Etc, etc.

Perhaps you should think about the past, study the past, and then look at what's going on now, before you start to shout.

And I repeat myself... The people who voted this guy in are the ones he's making into near-slaves who will have to work until they drop.

Malachi151

2nd June 2003, 05:41 PM

Perhaps you should think about the past, study the past, and then look at what's going on now, before you start to shout.

True, but actually this situation is different and worse than then.

There was more room to manuver then and a world that was more easy to mold to our wishes. Today the world is more dependant on the US too, like all these places that export heavily ot America.

So, whereas before they had room to manuver they have already done the manuvering over the past 30 years and now there is nowhere to go.

At the same time our economic problems will cause problems for Asia and Britain and South America too cause they all export heavily to us, so we will trigger a global economic problem as our internal economy crumbles.

Actually George is trying Supply Side action again, when the problem is demand side, but its more than American demand side, its a global problem caused by 50 years of American abuse of the global marketplace. See, there is not enough global demand to meet the needs of the marketplace that we have developed. There is not enough global demand because we have oppressed the world in order to provide cheap labor for our own market. Now the pendulm comes back to cut off our heads.

So see, America has ********** the world over for 50 years in order to benefit itself, but now the world is ********** and America is ********** too, only way to go is corporate feudalism. Capitalism is the stage between feudalism and socialism, and the world did not undergo the Socialist Revolution because America prevented it, so now we backslide toward feudalism.

Also:

There is very little that can be done to control the price of currency. Also, currency is measured relative to other currencies.

LOL, don't tell Alan Greenspan that he's been wasting his time all these years ;) Ummm.. the job of the Federal Reserve is to regulate the "price of currency".

Segnosaur

2nd June 2003, 10:20 PM

Originally posted by Malachi151

Not really. When you add in sales taxes and such the poor and middle pay a higher percentage, at least that will be true now that capital gains is being done the way Bush is doing it.

Ok, I'm in Canada, so I don't have the US figures handy...

What are the tax brackets down there? At what income do they kick in? You keep tossing around these 'facts' with no numbers to back them up. I do know the US has a 'progressive' tax system.

Now, for capital gains... is there a life time maximum? What is it? (In canada, we have Capital gains exemptions, but there is a lifetime max of $100,000.) Do they apply to things like home ownership?

Now you have suggested that 'sales tax' is one of the reasons that the poor and middle class pay a higher portion of their income. But last time I checked, sales tax was a state responsibility, not a federal one. So can Bush and the Feds really be blamed if some state governor wants to increase sales tax?

Edited to add: You seem to imply that reducing the tax on capital gains is a 'bad thing'... you don't think that the extra risk (after all, you can loose money very easily with capital investments), coupled with the possibility of increased economic activity (investing in a company can increase jobs) warrants at least a little consideration (even if making all capital gains tax free is a bit much)

Malachi151

2nd June 2003, 11:32 PM

I'm not sure if everyone can read this link because I think you have to have a subscription to the Wall Street Journal, but here are a few quotes:

http://online.wsj.com/article/0,,SB105458730933975100,00.html?mod=home_whats_new s_us

European and Japanese officials expressed concern that the U.S. is pushing down the already-weak dollar and threatening to snuff out any signs of a global economic recovery. President Bush, despite statements from his Treasury secretary that have helped weaken it, reassured them he is committed to a strong U.S. currency.

But the impact of the dollar's decline on other countries may depend as much on the European Central Bank as on the words of the world's leaders gathered in Evian, France, for an economic summit of the Group of Eight leading industrialized nations. Analysts expect the bank, which sets monetary policy for the 12-nation euro zone, to cut interest rates by at least one-quarter point when it meets on Thursday. They also expect such a rate cut to be one in a series of reductions before the end of the year.

The dollar's skid makes exports from the euro zone and Japan more expensive compared with U.S. exports. The weaker dollar also makes profits European companies earn in dollar-based economies overseas worth relatively less when brought back to Europe. The converse is true for the U.S., where the weaker dollar makes exports less expensive and strengthens repatriated corporate profits from stronger-currency economies.

Segnosaur

Current Plan

$0-$27,050 - 15%
$27,050-$65,550 - 28%
$65,550-$136,750 - 31%
$136,750-$297,350 - 36%
$297,350 and over - 39%

Bush plan

$0-$6,000 - 10%
$6,000-$27,050 - 15%
$27,550-$136,750 - 25%
$136,750 and over - 33%

Bush's plan is essentialy a flat tax. Is about as flat as you can get.

There is a one time capital gains exemption for the sale of homes. You choose when you want to take it.

It does not matter who collects the tax, the fact is the people pay the tax. The poor and middle class spend a higher percentage fo their income on purchasing taxable goods and so pay a higher share of their income in sales tax then the wealthy do. They also spend more of their money domestically then the wealthy so spend a large amount over seas where its not subject to American tax.

Also, FICA is a flat tax.

The capital gains tax should be graduated just like income tax with a cap at 30%. The "current" captial gains tax is 28%. Capitla gains tax law in America has changed many times. They used to have complex formulas where the tax rate changed depending on how long you held the porperty, so that longer term investments were taxed lower, and they have had several other schemes as well.

In theory IMO capital gains shoud lbe the highest taxed form of income in terms of "morality", but in terms of making the economy work you have to tax it lower. Capital gains is money made that you hardly have to work for and the amount of money that you can make is highly dependant on how wealthy you already are. So its a system that gretly benefits the rich, and allows the rich to quickly get richer while working class people can hardly participate.

It seems that today all the economic ideas of our leaders from early 20th century have been thrown away. As they said then and I think too, tax on labor should be the lowest form of tax, becuase earned income is limited by how much you can work. Capital gain is only limited by how much money you have and luck/manipulation.

The problem with economic balance is that an average worker only have is labor as his income, and that is limited by the number of hours he can work. The only money he earned is when he goes to work and does his job. His income has to compete with other more wealthy people who earn income though capital investment or ownign a business. These people don't have to work to earn money, that the beauty of it if you are those people. So, as you become mroe wealthy you can use earned income, in addition to capital gains, so that you are earnign money from two sources at the same time, or three, or three hundred sources all at the same time. Meanwhile, while the rich guy is simultaniously making money from hundreds of sources at the same time and also "making money while he sleeps" the worker is not. Yet he has to compete in the economy with the other guy making money from capital investment.

The worker then works harder and harder to stay ahead, but it will never work because the amount of money you can earn through labor is so limited compard to capital investment, yet if you never get enough money to make captial investments or you are simply not good at it, because here are plenty of investment sharks just out to take money, then you can never get ahead in that way.

So to tax a guy hihger on his earned income then a guy on his capital income is IMO, wrong, and it was in the opinon of our early leaders too. But then the rich became more and more powerful and have develped systems that benefit themselves all the more at the expense of the working man. Now they have seen fit to claim that forms of capital gains should not be taxed, specifically forms that go largely to the rich. Keep in mind that we have a few billionairs in this country who can invest bilions of dollars at 5% interst and make millions of dollars a year just letting that money sit in accounts, now that goes on tax free and these peope and their familys will never have to work again.

Also Bush is trying to fully get rid of the estate tax, which only taxes the top 2% of the wealthiest estates in America. So, once you get rid of tat tax and the dividend tax, yes that means ultimate power and families that will never work again forever with multi-billion dollar estates that will just sit and build power generation after generation without anyone even having to lift a finger. Quickly of course these people will own nearly everything in America.

Also, as for capital gain tax, the way it worked was that it was a constant 28%. That mean that if you were in the top 39% income tax bracket and you made $1 million in capital gains it was taxed at 28%, 11% below your earned income tax bracket.

If you were in the 28% tax bracket though it was taxed the same as your earned income. If you were in the 15% tax bracket then it was taxed higher then your income. So this created little incentive for poor and middle class people to invest, as if they could anyway since they have less money to invest with, if any. Yet it creates a high motivation for the wealthy because it allows them to make money at a lower tax rate in earned income. So it again unbalanced the system.

My idea is to make it graduated based on earned income and captial gains combined with a cap on captial gains at 30%, so as not to make it too high, but also to give more incentive to lower income people to invest while not giving a huge advantage to the wealthy who are already advantaged.

Now you have ot consider that the tax income from capital gains that is lost has to be made up somewhere. Since both the dividend tax and estate tax specfically targeted the wealthy that means that with their removal in order to make up for that loss some other tax will take up the burden, which will inevitable be shifted down towards the middle and poor classes, putting a higher tax burden on the lower income people and taking the burden off the wealthy.

This is what Rome did about 100 years before its fall. Things work more quickly now, I give it 20 years for America.

Segnosaur

2nd June 2003, 11:45 PM

Originally posted by jj
Translation: Let's just make up a straw man and argue against it, because this guy has our number but good and we really don't want people to notice!

You must think quite highly of yourself.

Oh no! he's got the goods!

First of all, you either don't understand the definition of 'straw man', or you think you put more into your original post than you really did. Basically, you made a whole bunch of statements, but you never gave any context, or any point that you were trying to make. (Why the heck were you bring that stuff up? To complain about Bush in general? Or about his latest policies? or all Republican presidents? or all presidents in general?)

Originally posted by jj
Now, in reality, were you alive in the 1970's? That is exactly what the Nixon/Agnew bunch did to the people then. Ever hear of "stagflation"? We got that way JUST the same way that shrub is heading us now. Care to deal with the facts instead of your straw man?

I am very familiar with 'stagflation'. We had it here in Canada a while ago.

Strangely enough, we had it with a left-of-center leader in power. Hmmm... I guess he must have been channeling the spirits of long dead republican presidents.

You mentioned dealing with 'facts'... would be nice if you actually presented some to back up your arguments.

Originally posted by jj

What evidence do you have of this? Although in terms of overall dollars the rich will benefit from the tax cuts, the middle class still has a lower marginal tax rate. So, the middle class usually pays less in tax both in terms of total dollar value, and as a percentage of their income.

Malachi already answered this.

Yes, and I've just responded to his comments.

You keep telling me to address the facts. But so far, I haven't seen many from you. What are the marginal tax rates there in the US? What incomes do they kick in at? (I'm in Canada so we have different tax rates here.) You keep wanting to address the facts... here's where you can present some. (Excuse me for being a skeptic.)

Also, Malachi mentioned that part of the reason lower/middle class people would pay more is due to Sales tax. But sales tax is a state responsibility, not a federal one. Should the shrub be blamed if some state wants to spend more money by raising sales taxes?

Originally posted by jj
See 1973 to 1985, give or take, for a historical example.
[/B]
Ummm.. you do realize that there was a Democrat in the white house for a good chunk of that time, don't you?

Inflation peaked in 1979 and 1980. Of course, during much of Ronnie Ray-gun's presidency (where he also had deficits) inflaction decreased from about 13% down to 4%.

Also, in that time period, inflation was under 6% in 1976, and roughly 3 or 4% around 1983-85.

So, while the peak inflation indeed was 'massive', you never did answer my question... how exactly do you define 'massive' inflation? Give me a number.

Originally posted by jj

What exactly are you referring to?
[/B]

History. You should study it.

I know history very well... Still doesn't tell me what you mean by 'skimming the profits'.
Originally posted by jj

How exactly does the government get rid of corporate research? Its up to the companies to decide for themselves what they want to invest.

Quack, quack...

Brilliant... I challenge you on a point, and that's the best response you can do. Way to cite facts! Woo hoo!

Originally posted by jj

Its called 'economic cycles'... the economy goes well for a while, looses steam, and then goes well for a while.

Like Brazil, Argentina, Wiemar Germany, and so on? Sometimes things recover. World history would suggest more often not.

Lets compare apples with apples, shall we?

Namely, free market economies which are run as democracies. For that we have the experiences of the US, Canada, Britian, most of the rest of Europe, etc. for the past century, which has shown that yes, indeed economies do act in cycles.

Comparing a free market economy in a democracy with a post war or post dictatorship economy doesn't make any sense.

Originally posted by jj

Guess what? Canada had massive debts for years, despite not fighting major conflicts and having a near-worthless military. Deficits can be caused by any type of government spending, not just military.

So what? I agree entirely, but you're supporting me here. There are a myriad number of ways to mess up, we all know that.

I can't really say I'm supporting you because your postings are so poorly designed that I can't figure out what you're trying to argue.

At times you seem to blame war, republicans in general, Bush in particular, with no indication of just what point you're trying to make.

I was pointing out that 'war' is often not the cause of deficits. (In fact, in most cases, it is rarely the cause.) So before you go trying to crucify someone for thier economic record, try to think critically about things... Is this person's record bad compared to others in similar circumstances? What exactly is the possible problem?

Originally posted by jj

Also, 'war' is often useful in providing stability. (A reduction in terrorist threats encourages tourism; the invasion of Iraq should reduce oil prices in the long term by increasing world supply, etc.)

At the cost of massive debt, that can only be inflated away unless the economy is in a massive growth period. Why do you think Shrub is letting the dollar crash? He has to, that will push up external prices, allowing INTERNAL prices to rise.

You fight wars when they need to be fought. Could you imagine after Pearl Harbour, the US telling Japan "Sorry, we can't fight you right now. Could you wait another couple of years before we start the war?"

Of course, a successful war will hopefully result in an economy more likely to exhibit massive growth (or at least be less likely to decline than had the war not been fought)

And could the dollar be crashing because, well, maybe it was a bit overvalued for a few years? (Just like the stock market had been overvalued during the 1990s from the Enrons, Worldcoms, and .com craze?)

Originally posted by jj

Well, thank goodness you're here to help us all see the light... After all, only you know anything about the economy.

Why thank you for putting words in my mouth. Nixon did it by accident and now Shrub is doing it. Accident? Who knows? Unlike you, who tells me what I mean instead of asking, I don't even try to read minds.

Putting words in your mouth? I haven't even figured out what the point of your orignal posting is. (You say you don't try to read minds, but you seem to expect other people to read yours.)

Accident? what accident are you refering to?

Personally I'd rather have you make your points clear in the first place, rather than have to ask you what you meant.

Originally posted by jj

I suggest that before you continue on your dismissal, you study a bit of history, and look at the stock market in the late 1960's (like now, low inflation, etc) and then into the 70's and 80's.

Same deal. Deficit taking away the money that business needs. Inflation due to weakening currency. Etc, etc.

Perhaps you should think about the past, study the past, and then look at what's going on now, before you start to shout.

And I repeat myself... The people who voted this guy in are the ones he's making into near-slaves who will have to work until they drop.

Again, very arrogant of you, first assuming that:
- I need to study history (I have taken many courses in History, at both the high school and university level. In addition, I have taken micro and macro economic courses, and make sure I keep abreast of business developments)
- That you're the only one who can see that he's making people into 'near slaves'
- That you're right (despite the fact that you haven't really provided any facts, and when I point out problems with your posting, you respond with poor analogies and statements like "quack quack")

Again, I ask... what WAS the point to your post?

(For the record, I am not necessarily a big fan of Bush. In fact, I think he's done one or 2 things to really harm the economy, the biggest of which is letting Microsoft out of its anti-trust suit. But I do believe in lower taxes for everyone, and greater self sufficiency. For better or worse, the recent tax cuts and other policies are the direction I think should be taken. I also belive that government debt shoudl be reduced, but as Ontario's expereince has shown, reducing taxes often DECREASES debt, because it stimulates the economy.)

shuize

3rd June 2003, 12:35 AM

Malachi,

I don't know if you took your information from a book or just something you remembered off the top of your head, but I believe the information about a one time capital gains break for the sale of a home is outdated. Not a big deal, but I wouldn't want to see anyone miss out on the opportunity to use the tax break on the sale of a second home thinking that their one time credit has already been used. For anyone interested, please check with a tax advisor, but as I recall you may now take the profit from the sale of any home used as your primary residence in 2 of the last 5 years tax free. It is no longer just a "one-time" credit and may be reused.

Gregor

3rd June 2003, 06:14 AM

Better ways to destroy a middle class

1. The quick way - adopt communism and everyone (but the government) is poor (see USSR, GDR, etc.)

2. The slightly slower way - adopt a socialist system (with strongly regressive taxes and high government regulation). This will eventually destroy your economy such that tax rates reach 70% and there is no incentive for productivity (See Sweden).

xouper

3rd June 2003, 06:40 AM

jj: How to destroy a middle class:One good thing about forums like this is that everyone gets to run their mouth.

JJ, I respect your opinions about many things, but not this time. What exactly did you hope to accomplish with your rant/troll?

Malachi151

3rd June 2003, 07:08 AM

Originally posted by shuize
Malachi,

I don't know if you took your information from a book or just something you remembered off the top of your head, but I believe the information about a one time capital gains break for the sale of a home is outdated. Not a big deal, but I wouldn't want to see anyone miss out on the opportunity to use the tax break on the sale of a second home thinking that their one time credit has already been used. For anyone interested, please check with a tax advisor, but as I recall you may now take the profit from the sale of any home used as your primary residence in 2 of the last 5 years tax free. It is no longer just a "one-time" credit and may be reused.

Cool, yeah that was just from memory, I didn't know that it changed.

3rd June 2003, 08:22 AM

Originally posted by Segnosaur
Edited to add: You seem to imply that reducing the tax on capital gains is a 'bad thing'...

No, I don't think it's a bad thing, UNLESS it's a selective reduction of tax on SOME capital gains, which is what we see here.

It's a selective reduction of SOME capital gains for SOME kinds of gains, gains that mostly people at very high wealth level have.

Some kinds of capital gain are excluded.

Perhaps you should look into this more before you jump down my throat again.

3rd June 2003, 08:37 AM

[QUOTE]Originally posted by Segnosaur

You must think quite highly of yourself.

Well, then, why did you bother to create a straw man to attack?

You surely do think highly of yourself, making pronouncement after pronouncement without ever bothering to engage in some historical research.

First of all, you either don't understand the definition of 'straw man', or you think you put more into your original post than you really did.

You made up the idea that I was talking strictly about the Bush administration from whole cloth. That's as straw-man as straw-man gets. It's really telling that you're even attacking my dismemberment of your pathetically obvious rhetorical cheating.

Ummm.. you do realize that there was a Democrat in the white house for a good chunk of that time, don't you?

You do realize that there's a major lag in the system, don't you?

So, while the peak inflation indeed was 'massive', you never did answer my question... how exactly do you define 'massive' inflation? Give me a number.

Pathetic. "Give me a number". PATHETIC! The ONLY number that matters is the long-term reduction in the value of a dollar compared to the ROI from the dollar. Long-term, get it? Long periods of moderate inflation are massive. Get it now? You do know what "compound interest" and "future value" are, I'm sure, so why are you asking for ONE value of interest? More argument tactics? Why do you keep falling back on deceptive argument tactics instead of addressing issues, anyhow?

Namely, free market economies which are run as democracies.

Except you can't say that for the USA any more. We have an unelected president, we have corporate takeover of the political process, and now the FCC has allowed complete control of the media in a market by any corporation with the money. The USA is not, until we have an elected president, at least, a democracy. It is not a democracy even then until issues can actually be debated in the media, which they presently can't. Just like in the 1950's, we have people being fired from media positions when they object to the actions of the government. Maybe you better wake up and realize what's going on down here.

For that we have the experiences of the US, Canada, Britian, most of the rest of Europe, etc. for the past century, which has shown that yes, indeed economies do act in cycles.

You keep repeating this like I have somehow disagreed with it.

I don't. What I object to is the present, apparently deliberate increase of the harm it does to low and middle-income workers.

Comparing a free market economy in a democracy with a post war or post dictatorship economy doesn't make any sense.

Since I didn't do that, that's just another straw man flapping in the sun. Please apply the match properly, and privately.

At times you seem to blame war, republicans in general, Bush in particular, with no indication of just what point you're trying to make.

Are you so nieve as to think that any major effect on an economy or the world comes from one cause?

I was pointing out that 'war' is often not the cause of deficits. (In fact, in most cases, it is rarely the cause.) So before you go trying to crucify someone for thier economic record, try to think critically about things... Is this person's record bad compared to others in similar circumstances? What exactly is the possible problem?

Yes, it's a worse record, because of the variety of stupid quick-fixes being applied.

You fight wars when they need to be fought. Could you imagine after Pearl Harbour, the US telling Japan "Sorry, we can't fight you right now. Could you wait another couple of years before we start the war?"

More straw men. I guess you imagine I'm against war, or did you just make that up to play to the US radical right? Well, it doesn't matter. What I'm against is the way that it's been handled, and the way that it's being paid for by setting us up for a hideous bout of inflation combined with multiple business failures.

Of course, a successful war will hopefully result in an economy more likely to exhibit massive growth (or at least be less likely to decline than had the war not been fought)

And a disaster like the Iraqi war, which is being lost as we speak, with the population taking on the aspect of the Vietnamese people during that "war" with appalling rapidity, will do what to the economy?

No, I'm not opposed to getting rid of Saddamn. I am opposed to us being the police force, and not having any plan to make the post-war country work.

And could the dollar be crashing because, well, maybe it was a bit overvalued for a few years? (Just like the stock market had been overvalued during the 1990s from the Enrons, Worldcoms, and .com craze?)

Partially. The crash is being encouraged though, instead of discouraged, and the dollar is being allowed to fall through the floor, allowing corporate profits and skimming to rise here, while the same government publishes bills that eliminate overtime pay for the workers.
[QUOTE]

Whatever. You don't want to put 2 and 2 together, I can't make you.

3rd June 2003, 08:40 AM

Originally posted by Gregor
Better ways to destroy a middle class

1. The quick way - adopt communism and everyone (but the government) is poor (see USSR, GDR, etc.)

2. The slightly slower way - adopt a socialist system (with strongly regressive taxes and high government regulation). This will eventually destroy your economy such that tax rates reach 70% and there is no incentive for productivity (See Sweden).

I wouldn't say that they are "better" ways, but your ways are very successful as well.

On the other hand, Sweden, which I visited last week, has a thriving economy at the present time, something I can attest for having visited Drottinggatan during last Friday's holiday sales.

But Sweden DID go through a period of serious problems, yes, and they did back off the socialist method quite a bit, so your point does hold.

Your ways also work (they are no faster or better, but they do work) to destroy the middle class. No doubt about it.

3rd June 2003, 08:41 AM

Originally posted by xouper
One good thing about forums like this is that everyone gets to run their mouth.

JJ, I respect your opinions about many things, but not this time. What exactly did you hope to accomplish with your rant/troll?

Well, I suggest that you check the value of your IRA, 401K, etc (assuming that you're a US citizen) before you disagree with me.

Calculate its future value, and how much support you will get from it when you're old.

Then get back to me.

xouper

3rd June 2003, 09:39 AM

jj: Well, I suggest that you check the value of your IRA, 401K, etc before you disagree with me.Reasonable people are quite entitled to disagree with your rhetoric and your economic philosophy regardless of the condition of their IRA or 401k. I'm not buying the arrogant notion that your position is the "one true way", that you are the only one that knows what's going on.

3rd June 2003, 10:03 AM

Originally posted by xouper
Reasonable people are quite entitled to disagree with your rhetoric and your economic philosophy regardless of the condition of their IRA or 401k. I'm not buying the arrogant notion that your position is the "one true way", that you are the only one that knows what's going on.

Come on, you're missing the point. There is no "one true way" here to start with.

But, seriously, the point of "what are your savings worth, and what do you expect them to be worth" is the point. I'm not asking if you're rich or poor here, that's not the point, what I'm asking is if you think the present government practices are going to enhance or reduce your retirement assets, and by how much (bearing in mind that all of our crystal balls, except perhaps for 'W's, are very cloudy, indeed).

There are a variety of ways that the economic problems we face right now could be dealt with, in both the long and short term.

Can you tell me what you'd do (same, different, whatever) to deal with them, and how it might relate to your own savings and chance of retirement, ability to send kids through school, etc.

In particular:

Would you want to support the value of the dollar, or not?

Would you want to grow, hold, or decrease deficit?

Would you advocate tax changes to support, rather than penalize research?

Would you support or attempt to change social policies that limit some of the most basic and important research going on?

Would you attempt to hold jobs, retrain, or simply send people to unemployment.

How would you deal with the present economic mess, which has nothign to do with supply, and everything to do with the unwillingness of people to spend, because of the uncertainty of savings, job, and civil freedoms?

I'd ask more questions, but I'm not trying to swamp you with questions, I'm trying to gather what you WOULD do, instead of what you would not agree with.

aggle_rithm

3rd June 2003, 10:49 AM

Originally posted by jj

Now, in reality, were you alive in the 1970's? That is exactly what the Nixon/Agnew bunch did to the people then. Ever hear of "stagflation"? We got that way JUST the same way that shrub is heading us now. Care to deal with the facts instead of your straw man?

If I remember correctly, most of the stagflation occured during the Carter administration, which is why he only lasted one term. I'm willing to consider the possibility that stagflation was caused by the economic policies of the previous administration, if you are willing to consider the possibility that the current economic situation was also caused by the previous administration.

In reality, the President has almost zero control over the economy. Just about all he can do is adjust taxes or spending. The Fed has much more control than the President, and it is designed to be independent of party affiliations.

3rd June 2003, 11:06 AM

Originally posted by aggle_rithm

If I remember correctly, most of the stagflation occured during the Carter administration, which is why he only lasted one term. I'm willing to consider the possibility that stagflation was caused by the economic policies of the previous administration, if you are willing to consider the possibility that the current economic situation was also caused by the previous administration.

The facts are not subject to negotiation, but in fact I do tend to at least partially agree with the position you appear to be putting forth.

I agree that the stagnation we face right now is partially the result of the previous administration's lack of control over corporate abuses, coupled with a rather appalling distain for intellectual progress and the resulting contempt for long-term thinking.

Now, I will say that Mr. Peanut was also partially responsible, and didn't cope that well with the economic issues during his term. It's not all due to the lag, either. I remember "WIN". Oy. On the other hand, what did Tricky Dick's "wage and price controls" have to do with it? Well, a lot, I think. Gee, let's set ourselves up for a situation where we have a shortage and no money to pay for it either. GOOD thinking, mate, ever lived in Argentina?

(well, the natural "cycle" is involved, too, but that's not something that any administration has been able to overcome, only deal with)

On the other hand, will you recall that when we throw this bum out and the raging inflation he's setting up comes along? Will you be there pointing out that it's 'W's fault? Or will you be crying for the head of the next king after George?

In reality, the President has almost zero control over the economy. Just about all he can do is adjust taxes or spending. The Fed has much more control than the President, and it is designed to be independent of party affiliations.

The President (in fact this president) brought about the end of this "bubble" by shooting his mouth of. That rather does ruin your comment about "zero" control. This President could also, by giving us some impression of domestic stability instead of continuing to try to terrify the entire country as much as possible, do very very much to change consumer confidence.

But instead what do we see? (ahem)

xouper

3rd June 2003, 11:07 AM

jj: There is no "one true way" here to start with.OK, I stand corrected. I was fooled by the seeming evangelistic tone of your earlier rants in this thread and your highly aggressive style.

I'd ask more questions, but I'm not trying to swamp you with questions, I'm trying to gather what you WOULD do, instead of what you would not agree with.Those are all very good questions, but this is not a topic I am interested in debating with you. I stated my disagreement and that's where I'm drawing the line, because I'd rather spend my time doing other things.

3rd June 2003, 11:54 AM

Originally posted by xouper
OK, I stand corrected. I was fooled by the seeming evangelistic tone of your earlier rants in this thread and your highly aggressive style.

Those are all very good questions, but this is not a topic I am interested in debating with you. I stated my disagreement and that's where I'm drawing the line, because I'd rather spend my time doing other things.

Well, I can't argue with your preference, but you're hardly going to convince me of the wisdom of this administration based on that, either.

c0rbin

3rd June 2003, 12:06 PM

Now you have suggested that 'sales tax' is one of the reasons that the poor and middle class pay a higher portion of their income. But last time I checked, sales tax was a state responsibility, not a federal one. So can Bush and the Feds really be blamed if some state governor wants to increase sales tax?

If the Federal Gov cuts funding for programs the state might have to step up to cover cost.

xouper

3rd June 2003, 12:08 PM

jj: Well, I can't argue with your preference, but you're hardly going to convince me of the wisdom of this administration based on that, either.Agreed. It is not my intention to convince you of anything other than I wished to express my disagreement with many of the things you've said in this thread, and that I am not convinced by your arguments and rhetoric.

For example, I get the distinct impression that nothing I could say would disabuse you of the notion that our current president was not legally elected. So why bother. I don't really care if that's your opinion. I just wanted to express my disagreement. It's an issue that has been beat to death on this forum and it seems nothing ever gets resolved.

corplinx

3rd June 2003, 12:15 PM

I think this whole destruction of the middle class thing is bunk. I think "classing" yourself in general is bunk though. I grew up poor, so does that make me "low class"?

I think the most relevant evolution of the middle-income household is the working pair. Nowadays to get by, most couples work. If we had a 10 percent flat tax, I could afford for my wife not to work. However, to achieve the standard of living we desire, she also must work. This is the case for many two income/middle income families.

I think the destruction of the role of homemaker is the most relevant evolution of middle income families over the past 15 years. And of course, the more their incomes add up to, the more they get taxed.

Say two young professionals marry and each makes 55k. Boom, higher tax bracket. No kids, no home? No tax deductions. Now they find themselves paying for the government services that their friends living in a house, with 2 kids, and maxed 401k contributions are using.

3rd June 2003, 01:02 PM

Originally posted by corplinx
I think this whole destruction of the middle class thing is bunk. I think "classing" yourself in general is bunk though. I grew up poor, so does that make me "low class"?

Well, you're avoiding the point, Corps. I grew up poor, too. Where I grew up poor, the people who weren't went out of their way to try to ensure that people who started that way stayed that way. I believe we've already discussed things like this, and how class structures work in mill towns.

I do think that ACCEPTING being classed is really, really dumb.

You, however, seem to think that the middle income family is not endangered. Please, in this day of the end of pensions, the bankruptcy of "Social Security", the volatility of the 401K (now, some of that is unavoidable, I am not talking about normal market risks or those who really went overboard ignoring them here, please), etc, tell me how you're going to retire.

Really.

How much stagflation like the last time can you withstand, where your assets appreciate at 1% while the currency inflates at 10%? Just how much of that can you withstand.

Really.

All of the pension systems, etc, are going to be stressed to the max when the "baby boom" retires. The number of people who are retired is going to be larger than ever, and the number of people working in senior jobs will be smaller than ever, so do you really think we're safe, here?

I think the most relevant evolution of the middle-income household is the working pair. Nowadays to get by, most couples work. If we had a 10 percent flat tax, I could afford for my wife not to work. However, to achieve the standard of living we desire, she also must work. This is the case for many two income/middle income families.

Can't argue with you there. You seem to be agreeing entirely with me, and maybe even pointing out that the middle income family no longer exists, we just have two "lower-middle-income" family members that get to add things up, and pay the marriage penalty to boot.

I think the destruction of the role of homemaker is the most relevant evolution of middle income families over the past 15 years. And of course, the more their incomes add up to, the more they get taxed.

Yep, and why this "family values" government makes sure to take more out of families who are married than families who aren't still amazes me to this day. Got a solution for that one?

The destruction of the value of homemaker is quite true, and I fear that we have yet to see the real effects it's causing. Now, I am NOT, repeat NOT telling anyone to stop working and go home, please, I think that's a barbaric thing to even suggest, but I do have kids, and I do think that we have to invest some time in the future by raising them.

We were (and will be again) a two-income family, and it's hard to raise kids and do that at the same time.

Say two young professionals marry and each makes 55k. Boom, higher tax bracket. No kids, no home? No tax deductions. Now they find themselves paying for the government services that their friends living in a house, with 2 kids, and maxed 401k contributions are using.
Regretably, what would you propose here? Should people be taxed only on what services they, themselves use?

Before you say "yes" I urge you, once again, to consider your own retirement.

3rd June 2003, 01:05 PM

Originally posted by xouper
For example, I get the distinct impression that nothing I could say would disabuse you of the notion that our current president was not legally elected.

Well, I have yet to have anyone or anything explain to me why a well-educated group normally wished quite ill of by Pat Buchanan would vote en-masse for him.

Something went wrong, and the answers will never be available, but I am troubled by the idea that we have a president that was appointed by the Supreme Court. You have to admit that that, in fact, is exactly what we have.

corplinx

3rd June 2003, 01:13 PM

Originally posted by jj

Before you say "yes" I urge you, once again, to consider your own retirement.

Social Security was never meant to be a retirement fund for people who can save for their own retirement. If anyone is actually planning on this, its their own damned fault. Pension funds main problem seems to be health care costs. The solution to this is of course to reduce all-inclusive health plans to catastrophic ones. People can pay a 50 dollar doctor visit bill. They can't pay 10k-100k for something catastrophic.

As for saving for your retirement, this also seems to be part of the evolution of the working pair. They both work and max out their 401k plans. As they bounce from job to job they accrue IRAs as they rollover the 401ks.

As for me, me and my wife will probably to continue to both hoping to retire _early_.

Saving just a little every month produces great results over time.

xouper

3rd June 2003, 01:17 PM

jj: ... I am troubled by the idea that we have a president that was appointed by the Supreme Court. You have to admit that that, in fact, is exactly what we have. I need do no such thing. The president was NOT appointed by any court. As I already said, this has been beaten to death on this forum and I decline your implied invitation to beat it some more. You've stated your opinion, and I have stated mine. Let's move on, shall we?

3rd June 2003, 02:57 PM

Originally posted by corplinx

Social Security was never meant to be a retirement fund for people who can save for their own retirement.

Well, quite, but I have to pay money into it, don't I?

If anyone is actually planning on this, its their own damned fault. Pension funds main problem seems to be health care costs. The solution to this is of course to reduce all-inclusive health plans to catastrophic ones. People can pay a 50 dollar doctor visit bill. They can't pay 10k-100k for something catastrophic.

Of course, preventive medicine is simply outside that idea completely, isn't it? I think it's clear as daylight that preventive medicine pays off handsomely, yes? Or do you disagree?

As for saving for your retirement, this also seems to be part of the evolution of the working pair. They both work and max out their 401k plans. As they bounce from job to job they accrue IRAs as they rollover the 401ks.

Quite. But 401K's have limited contribution levels, troublesome estate complications, etc. Still, I agree, a lot better than nothing.

As for me, me and my wife will probably to continue to both hoping to retire _early_.

Ditto, unless (which I fully expect at this time) the value of our plans gets inflated to heck and gone.

And that, sir, is the point I keep trying to make.

Saving just a little every month produces great results over time.
You're explaining geometric series to a signal processing person? Brave soul.

You're right, of course. My contributions now are nearly meaningless, though, it's the ones I did in 1980 that are going to carry me through as much as anything does, if they keep a useful value until I get old enough to access them.

corplinx

3rd June 2003, 03:50 PM

Originally posted by jj

You're right, of course. My contributions now are nearly meaningless, though, it's the ones I did in 1980 that are going to carry me through as much as anything does, if they keep a useful value until I get old enough to access them.

Maxing a 401k based on stocks during a time of overpriced stocks isnt good (the tech stock bubble). I think people learned the hard way you need to diversify with bonds.

If you take risks you always have a chance to get burned.

3rd June 2003, 03:57 PM

Originally posted by corplinx

Maxing a 401k based on stocks during a time of overpriced stocks isnt good (the tech stock bubble). I think people learned the hard way you need to diversify with bonds.

If you take risks you always have a chance to get burned.

Well, yes, but that's not the point. I bailed to bonds in 1998. Still can't complain about that. Missed 5%, also missed -50%. I can live with that outcome, thanks. :)

The point is that even if you invest sensibly, you stand to be screwed completely by a massive slide in the dollar, first exernally (already happening) then internally (when people can raise prices because of the drop in external competition).

fishbob

3rd June 2003, 06:41 PM

So can Bush and the Feds really be blamed if some state governor wants to increase sales tax? Yes indeedy. When the Feds cut services, the states have to pick up the slack. Many states are now struggling with their budgets and will make up the difference with sales taxes, state income taxes, or strangely named user fees that quack just like taxes. So you pay less to the Feds and more to the state.

Is there any real long term change in the total amount that comes out of your pocket? Which politician looks better while all this juggling goes on?

aggle_rithm

4th June 2003, 06:07 AM

Originally posted by jj

The President (in fact this president) brought about the end of this "bubble" by shooting his mouth of. That rather does ruin your comment about "zero" control.

Interesting. Care to elaborate on that?

This President could also, by giving us some impression of domestic stability instead of continuing to try to terrify the entire country as much as possible, do very very much to change consumer confidence.

But instead what do we see? (ahem)

Poor W can't win. He has been criticized for not knowing about the 9/11 attacks ahead of time. Now that he's being hyper-vigilant, he's accused of "terrifying the entire country".

I'm glad I ain't him.

4th June 2003, 08:03 AM

Originally posted by aggle_rithm

Interesting. Care to elaborate on that?

What's to elaborate on?

Do you or do you not recall his remarks during the campaign? Now, his remarks weren't that outrageous, UNTIL he started using the failing state of the economy as another plank against Gore.

But, in fact, he did create uncertainy. He certainly wasn't the ONLY cause, bubbles do burst sooner or later, they must, but in fact he had both hands on the pin that stuck the bubble.

If he would have said later that he did have something to do with it, instead of laying the effects of his own act at Gore's feet, I'd be much more impressed with him.

Poor W can't win. He has been criticized for not knowing about the 9/11 attacks ahead of time. Now that he's being hyper-vigilant, he's accused of "terrifying the entire country".

I'm glad I ain't him.
I'm quite sympathetic to your point there, actually. I'd never take the job of President, and I doubt if many intellegent people would consider it.

On the other hand, creating hysteria for the purpose of persuing his political agenda is not merely "hypervigilance", it's cynical manipulation.

But why are we talking about this? What about the set up for a new period of stagflation to keep the baby boomers working until they drop.

Why doesn't anyone care about that? Or are us baby boomers all simply old and in the way now, via a typical Gingerich meanness policy?

xouper

4th June 2003, 08:16 AM

jj: Why doesn't anyone care about that? Who said people don't care about that?

4th June 2003, 08:49 AM

Originally posted by xouper
Who said people don't care about that?

I guess you're right. Being in a state of denial isn't the same as not caring.

xouper

4th June 2003, 09:46 AM

jj: I guess you're right. Being in a state of denial isn't the same as not caring.Are you now suggesting everyone is either in a state of denial or doesn't care?

4th June 2003, 09:50 AM

Originally posted by xouper
Are you now suggesting everyone is either in a state of denial or doesn't care?

Are you trying to create the illusion of the fallacy of the excluded middle?

xouper

4th June 2003, 10:19 AM

jj: Are you trying to create the illusion of the fallacy of the excluded middle?Are you admitting there are other choices than the two you have so far offered?

aggle_rithm

4th June 2003, 10:21 AM

Originally posted by jj

What's to elaborate on?

Your contention that Bush caused the economic bubble to burst by his words. I still don't buy it, after seeing your arguments. There were many, many variables that contributed to the collapse. Maybe Bush's comments were one of them. Maybe not. Who can tell?

But why are we talking about this? What about the set up for a new period of stagflation to keep the baby boomers working until they drop.

Why doesn't anyone care about that?

I can't speak for anyone else, but I don't care about it because there are so many other economic boogiemen that are more likely to bite us, such as deflation or the "jobless recovery".

Inflation is usually caused by high interest rates. Look at the interest rates during the last stagflation period. Now look at the interest rates today. Unless we start printing up gobs of extra money, I don't see how inflation will be a problem in the foreseeable future.

Also, if stagflation does happen, baby boomers don't have to worry about working til they drop. They'll be unemployed!

;)

Segnosaur

4th June 2003, 10:33 AM

All right, some actual facts. I respect that (even if I might disagree with some details).

Originally posted by Malachi151
Segnosaur
Current Plan

$0-$27,050 - 15%
$27,050-$65,550 - 28%
$65,550-$136,750 - 31%
$136,750-$297,350 - 36%
$297,350 and over - 39%

Bush plan

$0-$6,000 - 10%
$6,000-$27,050 - 15%
$27,550-$136,750 - 25%
$136,750 and over - 33%

Ok, those figures seem quite reasonable. From the looks of things, almost everyone will be paying less tax. The only people who don't really benefit from teh tax reduction are people in the $6k-27k range. (Personally, I would have provided a little less tax relief for one of the higher tax brakets and given it to peope in that tax bracket. But, they still are paying a lower nominal rate than people earning > $27k. And the poorest people do see their taxes reduced by 1/3.)

One argument that has been made is that people in the lower tax brackets will be paying a higher portion of their income due to things like sales tax. So, lets see....

If I am in the 6-27k bracket (lets say earning $20k), every $100 I earn I have to pay $15. In the high tax bracket (lets say, $200k), I would have to pay $33. Now, to simplify things, lets say that the person in the high tax bracket pays NO sales tax (not a perfect assumption; if anything though, it strengthens your argument and weakens mine) and the person in the 6-27k bracket spends all their money on items that are subject to sales tax (again a simplfying argument.)

The person earning 200k would pay 66k. The person earning 20k would pay 3k in income taxes. The amount they'd have to pay in sales tax in order to pay the same fraction of their income in taxes as the high-income earner is 3.6k. Now, after paying income tax, they have 17k left. Sales taxes would have to be approximately 21% in order to make the 'low' income earner pay a higher portion of tax than the high income earner.

Ok, that's a lot of 'rough' calculations, and I've made some simplifications (again, most of my simplifications probably weaken my argument.) But frankly, I don't see these changes as anything more than 'tinkering'. A few flaws, sure, but nothing that will lead to the decline of western civilization as we know it.

Originally posted by Malachi151
Segnosaur
Bush's plan is essentialy a flat tax. Is about as flat as you can get.

No, the flatest tax you can get is for everyone to pay exactly the same rate (preferably 0).

Yes, one tax bracket was removed. (Heck, Canada only has 3 tax brackets, if i remember correctly.) But lets see: Prior to Bush's tinkering, there was a 24% difference between the highest and lowest tax brackets. After this tax change, it will be 23%.

Originally posted by Malachi151
Segnosaur

It does not matter who collects the tax, the fact is the people pay the tax. The poor and middle class spend a higher percentage fo their income on purchasing taxable goods and so pay a higher share of their income in sales tax then the wealthy do. They also spend more of their money domestically then the wealthy so spend a large amount over seas where its not subject to American tax.

I agree that there is only 1 'taxpayer', regardless of who collects the tax. What I was doing was pointing out how the States should shoulder much of the responsibility if sales taxes cause a person to pay more of their income to the government.

Consider an extreme example: a state that decides to slap on a 50% sales tax. So, your person earning $20k (who has 17k left after income tax). With the sales tax, the person would be paying an extra 5.6k in taxes, and his actual tax rate is 43%. But, is it Bush's fault that the state would have such a high tax rate? Other states have lower rates (in fact, I think Texas has a 0% sales tax rate.)

And I do agree.. the poor do pay a higher portion of their income on taxable goods than the rich. But, as my example above showed, the rich person still likely pays a higher portion of their income in taxes.

Originally posted by Malachi151
Segnosaur
In theory IMO capital gains shoud lbe the highest taxed form of income in terms of "morality", but in terms of making the economy work you have to tax it lower. Capital gains is money made that you hardly have to work for and the amount of money that you can make is highly dependant on how wealthy you already are. So its a system that gretly benefits the rich, and allows the rich to quickly get richer while working class people can hardly participate.

Ok, here's where I really have to disagree... While I don't think capital gains should be ignored, I don't think they should be subject to higher taxes due to morality, for several reasons:
- You assume people 'hardly have to work for it'... But there are a lot of small business owners who have capital gains based on the increase in the value of their business, which they DID have to work to achieve.
- There is a risk involved. If I work, I know that I will get a paycheck by the end of the day. A person investing in a business could end up richer, but they could also end up loosing a lot.
- Capital gains do provide secondary benefits. Yes, the person investing in a business is doing so in an attempt to make themselves weathier; however doing so has the secondary benefit of creating jobs.

Originally posted by Malachi151
Segnosaur
Meanwhile, while the rich guy is simultaniously making money from hundreds of sources at the same time and also "making money while he sleeps" the worker is not. Yet he has to compete in the economy with the other guy making money from capital investment.

Again you are assuming that the 'rich person' is idle-rich. Many 'rich' people had to put a lot of effort into starting their business and watching them grow. In many cases, they put on longer hours (with less money at the end of the day) than some of their employees.

Originally posted by Malachi151
Segnosaur
Keep in mind that we have a few billionairs in this country who can invest bilions of dollars at 5% interst and make millions of dollars a year just letting that money sit in accounts, now that goes on tax free and these peope and their familys will never have to work again.

Are you sure about this? In Canada, interest (on bank accounts, bonds, etc.) is taxed as all other income. The only thing that counts as a capital gain is the increase in the value of a company or asset.

Either way, how many 'idle rich' do you really think there are in the U.S.? How many second and 3rd generation 'rich' people end up poor? (It happens; look at the 'eatons' family in Canada.) How many of those 'billionairs' became rich because they were 1) smart and 2) willing to work hard at certain points in their life and 3) willing to take a risk?

Originally posted by Malachi151
Segnosaur
Also, as for capital gain tax, the way it worked was that it was a constant 28%.

If you were in the 28% tax bracket though it was taxed the same as your earned income. If you were in the 15% tax bracket then it was taxed higher then your income. So this created little incentive for poor and middle class people to invest, as if they could anyway since they have less money to invest with, if any.

Here you do have a point.

In Canada, I believe we have a 'life time' capital gains exemption. So, up to $100k of capital gains is 'tax free'. (Lower income people can benefit from that, whereas the 'rich' people would see little use of it, if they earned significantly more than $100k.)

Of course, in Canada, poor people ALSO have certain tax shelters that rich people do NOT have. For example, we have Registered Retirement Savings Plans (RRSPs), which allow people to invest in stocks, bonds, mutual funds, etc. and have the investment amount removed from their current income. However, because of 'limits', rich people would not be able to get the same use of things.

Originally posted by Malachi151
Segnosaur
Now you have ot consider that the tax income from capital gains that is lost has to be made up somewhere. Since both the dividend tax and estate tax specfically targeted the wealthy that means that with their removal in order to make up for that loss some other tax will take up the burden, which will inevitable be shifted down towards the middle and poor classes, putting a higher tax burden on the lower income people and taking the burden off the wealthy.

But the rich are STILL paying a higher portion of their income in taxes (and in fact, the tax bill for virtually everyone will be going down).

And could it be possible that, rather than 'shifting' the tax burden, some of the measures might actually provide an economic benefit (reducing capital gains taxes would make more people invest in business rather than keep it in savings accounts, and thus provide more jobs), and by doing so would expand the economy and result in more tax money overall. And a reduction in income taxes for lower and middle income people will allow them to spend more, thus further stimulating the economy.

A few years ago, we had a provincial government who said they were going to reduce taxes across the board (as well as cut expenses). Everyone predicted massive government deficits. Instead, the cuts helped stimulate our economy, brought more jobs to the province, and gave more money to the lower and middle income people to spend. The result was an INCREASE in governemtn revenue.

Originally posted by Malachi151
Segnosaur
This is what Rome did about 100 years before its fall. Things work more quickly now, I give it 20 years for America.

I have heard of many excuses why Rome fell (everything from Christianity to the use of lead.) I've never heard anyone claiming a change in capital gains tax laws lead to its fall.

For the record, I believe that the fall of Rome was likely caused by an increased reliance on non-Roman troops for defense, which became necessary due to changes in citizenship rules.

I still don't see that these tax changes are anything more than just minor tinkering. Yes, there are some things that could be done better, but certainly nothing there that will spell the end of civilization as we know it.

4th June 2003, 11:56 AM

Originally posted by xouper
Are you admitting there are other choices than the two you have so far offered?

It's only you own imagination that created the dichotomy. I don't have to admit anything.

Let me ask you: Why did you create the appearance of the dichotomy by your own words, when no such dichotomy exists. You'd think my position alone would be a counterexample to the two responses that you offered, wouldn't you?

Well, I would. DOH!

4th June 2003, 11:59 AM

Originally posted by aggle_rithm

I can't speak for anyone else, but I don't care about it because there are so many other economic boogiemen that are more likely to bite us, such as deflation or the "jobless recovery".

If it makes you any happier, I agree that those are serious problems, but they in fact LEAD to the situation we had in the 1970's.

Inflation is usually caused by high interest rates. Look at the interest rates during the last stagflation period. Now look at the interest rates today. Unless we start printing up gobs of extra money, I don't see how inflation will be a problem in the foreseeable future.

Dollar tumbles. Imports go up. As a result, energy cost goes up. Everything in this economy scales to energy cost. Next question?

(Btw, not quite everything, of course, but the approximation is annoyingly accurate, if you check the figures.)

Also, if stagflation does happen, baby boomers don't have to worry about working til they drop. They'll be unemployed!
;)

Err, not quite. Rather, they'll be just where the big businesses want them, forced to work at any price, in any place, without regard to health, safety, or welfare.

4th June 2003, 12:02 PM

Originally posted by Segnosaur
(among other things, spoke about capital gains)

I have to admit that I part ways entirely with Malachi on the idea of capital gains taxes.

Capital investment IS a good thing.

But why is the present relief not on the most common forms of capital gains for the upper-middle class, but only on the forms that the elite can practically make investment in?

Or was the report that came out that real property investment is NOT part of the "tax relief" for capital gains wrong?

Segnosaur

4th June 2003, 01:33 PM

Originally posted by jj

Well, then, why did you bother to create a straw man to attack?

You surely do think highly of yourself, making pronouncement after pronouncement without ever bothering to engage in some historical research.

You made up the idea that I was talking strictly about the Bush administration from whole cloth. That's as straw-man as straw-man gets. It's really telling that you're even attacking my dismemberment of your pathetically obvious rhetorical cheating.

I say again... I did not create a straw man. Do you even know how to read english? Because you certainly seem to have problems writing it.

You posted a whole bunch of statements, but gave no context, and no indication of the point you were making. I specifically indicated that I wasn't sure what you were refering to, but given the text of some of your statements, I assumed you were criticizing Bush's economic policies.

After reading this response, I STILL have no idea what you are refering to. If I give you a dollar, will you actually tell me the point your original point was trying to make?

As for doing historical research and making 'pronouncement after pronouncement'... you are the one who made wild statments in your original post, with no evidence or facts to back them up. And when the 'research' is done, the facts don't support your assertions.

Originally posted by jj
Ummm.. you do realize that there was a Democrat in the white house for a good chunk of that time, don't you?

You do realize that there's a major lag in the system, don't you?

Yes I do. You do realize that unemployment was worse at the END of Carter's term, and the beginning of Regan's term... Do you think this lag lasts more than 4 years?

Note: I remember a situation where I was debating with DrChinese, another Bush-hater, who claimed that there was no lag. I'd love to see you debate him on how much 'lag' there really is.

Originally posted by jj
Pathetic. "Give me a number". PATHETIC! The ONLY number that matters is the long-term reduction in the value of a dollar compared to the ROI from the dollar. Long-term, get it? Long periods of moderate inflation are massive. Get it now? You do know what "compound interest" and "future value" are, I'm sure, so why are you asking for ONE value of interest? More argument tactics? Why do you keep falling back on deceptive argument tactics instead of addressing issues, anyhow?

The most 'pathetic' thing here seems to be your understanding of economics. I suggest courses in micro or macroeconomics.

Rule 1: Some inflation is necessary. It is through inflation that the costs of labour, raw materials and final product are balanced at a fair point
Rule 2: Even a 'small' rate of inflation will look big, given a 'long enough' time.

There are 2 dangers: If inflation is too low, the 'balance' I mentioned earlier does not establish itself (and in the extreme case, prices decrease which people from making purchases.) If inflation is too high, people cannot 'adjust' to the price rises.

Moderate inflation (even though you don't seem to have the guts to specify numbers, I'd say in the 2-7% range) allow the economy to balance out, while at the same time making it easy for people to make adjustments.

Originally posted by jj

Namely, free market economies which are run as democracies.

Except you can't say that for the USA any more. We have an unelected president, we have corporate takeover of the political process, and now the FCC has allowed complete control of the media in a market by any corporation with the money.

Ok, that raises a red flag right there.... unelected president shows that you get your information from the Michael Moore school of brain damaged thought, rather than from reality.

The 'unelected' status of the president has been discussed in many other threads, so I won't rehash everything... But, for better or worse, he was elected according to the rules layed out by the U.S. government and constitution. I believe recounts have shown that he would have won Florida anyways. Get over it. There will be another election in a few more years.

Originally posted by jj
It is not a democracy even then until issues can actually be debated in the media, which they presently can't. Just like in the 1950's, we have people being fired from media positions when they object to the actions of the government. Maybe you better wake up and realize what's going on down here.

Oh, yes, its the 'right wing media conspiricy' again. Tell me, is there a left-wing cliche you will NOT trot out?

Lets face it, even though media is often run by 'big corporatons', the reporters/newscasters/editors usually have a left wing bias. And, ultimately, the slant of a particular newspaper/TV station is dictated by what the viewers want to watch. There is no more right wing bias than left wing bias.

And I do know what's 'going on down there'... knee jerk reactions by left-wing reactionaries who prefer forming their opinions on subjects they do not understand from cliches rather than looking objectively at the facts.

Originally posted by jj

For that we have the experiences of the US, Canada, Britian, most of the rest of Europe, etc. for the past century, which has shown that yes, indeed economies do act in cycles.

You keep repeating this like I have somehow disagreed with it.

You can't even keep your story straight from one posting to another, can you?

When I mentioned the 'economic cycles', you pointed out places like post-WW1 germany. If you did not think that that refuted my 'cycles' comment, then why did you post it?

Originally posted by jj
I don't. What I object to is the present, apparently deliberate increase of the harm it does to low and middle-income workers.

The government does not have the ability to prevent economic cycles. The best they can do is try to 'smooth' them out.

Unless you believe the illuminauti or Jewish world leaders somehow control the entire world economy.

Originally posted by jj

Comparing a free market economy in a democracy with a post war or post dictatorship economy doesn't make any sense.

Since I didn't do that, that's just another straw man flapping in the sun. Please apply the match properly, and privately.

Again, why did you bring up post-WW1 Germany and other examples then? I certainly wasn't the first to mention them.

Originally posted by jj

You fight wars when they need to be fought. Could you imagine after Pearl Harbour, the US telling Japan "Sorry, we can't fight you right now. Could you wait another couple of years before we start the war?"

More straw men. I guess you imagine I'm against war, or did you just make that up to play to the US radical right? Well, it doesn't matter. What I'm against is the way that it's been handled, and the way that it's being paid for by setting us up for a hideous bout of inflation combined with multiple business failures.

Again, you were the one who brought up the cost of the war as a bad effect on the economy.

Now, as for the 'hideous inflation' and 'multiple business failures'... We are currently in a slump, likely caused by basic economic cycles. Much of the success of the 90s was illusionary (the .com bubble and Enron/worldcom), and we're recovering from when that artificial reality crashed.

Right now, inflation is not a problem, but deflation is a definite possibility without action. (Deflation is bad because it will cause people to avoid purchases because they will be willing to wait until things are 'cheaper'.)

Now, you're suggesting 'multiple business failures'. But nowhere have you pointed out just how or why these business failures are going to come about.

Originally posted by jj
And a disaster like the Iraqi war, which is being lost as we speak, with the population taking on the aspect of the Vietnamese people during that "war" with appalling rapidity, will do what to the economy?

The US hasn't even stopped all fighting, and you're saying the war is being lost? Lets wait a few months before passing judgement on the future of Iraq, m'kay?

Originally posted by jj

Partially. The crash is being encouraged though, instead of discouraged, and the dollar is being allowed to fall through the floor, allowing corporate profits and skimming to rise here, while the same government publishes bills that eliminate overtime pay for the workers.

There's that word 'skimming'... I ask again.. what exactly do you mean by 'skimming'.

Originally posted by jj
Whatever. You don't want to put 2 and 2 together, I can't make you.

And I'd like you to actually come up with a point to your postings.

And I'd like you to get your information from areas other than the Michael Moore school of economical and Political Moronics.

I notice a trend in the way you post:
- I make a point
- You post a counter example/counter point
- I point out why I disagree with your counter
- You turn around and say "straw man...that's not what I was saying"
You did it when you talked about economic cycles (using post WW2 germany as your counter example) and you did it when you talked about going to war. Perhaps you should put more thought into your counter-points/counter-postings.

(edited to fix formatting)

Segnosaur

4th June 2003, 01:45 PM

Originally posted by jj

Dollar tumbles. Imports go up. As a result, energy cost goes up.

Actually, you did make a small mistake there...

If the dollar goes down, imports will actually go down as well (since the cost of the imports will appear greater to the US buyer.) Exports may go up though, since the cheaper dollar means our goods will appear less expensive to the foreign consumer.

Canada has been very successful at this for a very long time. Our economy has done as well as it has, mostly because our low Canadian dollar (usually below 70 cents American) has made our exports particularly attractive to the US buyer.

Now, it should be noted that this currency difference is really only a temporary effect. Ultimately, a country does not buy things with dollars (or Euros), they buy foreign products using its own products. So, although one country may buy/sell more to foreign markets if its price goes down, in the long run the important thing is that the country has sold X units of a product and eventually received Y units of another product. (Currency just makes the exchange easier.)

Now, a decrease in the cost of the US dollar will make it more expensive to buy oil from foreign countries (which may hurt the economy); however, this will be partly offset by an overall decrease in price caused by the increased supply now that Iraqi sanctions are over.

4th June 2003, 01:49 PM

Originally posted by Segnosaur

Actually, you did make a small mistake there...

If the dollar goes down, imports will actually go down as well (since the cost of the imports will appear greater to the US buyer.) Exports may go up though, since the cheaper dollar means our goods will appear less expensive to the foreign consumer.

Err, the COST of imports will go up. No, not a mistake, a badly phrased reply, though. Especially the COST of oil, which is a basically inelastic market.

And since exports will also rise, the manufacturer here has even more motivation to raise prices, eh?

aggle_rithm

4th June 2003, 01:57 PM

Originally posted by jj
If it makes you any happier, I agree that those are serious problems, but they in fact LEAD to the situation we had in the 1970's.

We had deflation in the 70's? And that led to inflation?

No. We haven't had deflation since the Great Depression.

Err, not quite. Rather, they'll be just where the big businesses want them, forced to work at any price, in any place, without regard to health, safety, or welfare.

Why do you suppose the big businesses want this? Is there a conspiracy I'm not aware of?

4th June 2003, 02:06 PM

Originally posted by Segnosaur

I say again... I did not create a straw man. Do you even know how to read english? Because you certainly seem to have problems writing it.

Gosh, you made a completely unjustified supposition, and launched off into outer space. You built the straw man, and you burnt it. You can say it's NOT one until the crows stop landing on it, man, it doesn't matter.

After reading this response, I STILL have no idea what you are refering to. If I give you a dollar, will you actually tell me the point your original point was trying to make?

This after all of your ad-hominem about how I can't write? It's simple, man, like I SAID ABOUT 14 TIMES, the present economic policies are going to push people down out of the middle class. Gosh, seems like enough other people have been upset by that that it's not my writing that's the problem, here.

Face it, the present US policies mimic Brazil and Argentina more than anything else, corruption included. We know how THAT worked out, don't we?

Yes I do. You do realize that unemployment was worse at the END of Carter's term, and the beginning of Regan's term... Do you think this lag lasts more than 4 years?

Um, just how long do you think a business cycle lags? Err, yes, I do. When it gets down to creating new, decent jobs, the lag is longest, the worker is on the butt end of the cycle. First you have to develop a new business, then you have to get it going, then you start to manufacture, and THEN you get jobs.

The most 'pathetic' thing here seems to be your understanding of economics. I suggest courses in micro or macroeconomics.

Pure ad-hominem only pisses off the opponent. You're starting to succeed.

Rule 1: Some inflation is necessary. It is through inflation that the costs of labour, raw materials and final product are balanced at a fair point

Dogma is great, isn't it? The mathematics is another story. Certainly you cite one possible and very common scenario. It works, but you're resolutely ignoring half of the issue. Why?

Rule 2: Even a 'small' rate of inflation will look big, given a 'long enough' time.

Why do you keep leaving out the comparison with the ROI? Inflation is HALF the story.

Moderate inflation (even though you don't seem to have the guts to specify numbers, I'd say in the 2-7% range) allow the economy to balance out, while at the same time making it easy for people to make adjustments.

It is one such fashion.

Ok, that raises a red flag right there.... unelected president shows that you get your information from the Michael Moore school of brain damaged thought, rather than from reality.

It's a fact. The president was put into office (I won't quibble with people about the term "appointed") by a court. It's true, it's simple, and it's fact. The court decided the election. It's a fact. If you don't accept that, you didn't read the news, or you're simply malicious.

Oh, I see. You ARE malicious!

Michael Moore is irrelevant. (In my opinion, to nearly everything.) It's odd that you'd bring up the current neo-conservative whipping boy when nobody else has. I wonder why? Oh, I know, you want to suggest I agree with him somehow. Gosh, could it be, PROPAGANDA!?

Until we can get to the point where you don't unethically, immorally, and dishonestly call people who disagree with you " ... school of brain damaged thought ..." there will be no discussion to be had.

You have no reason, authority, or evidence to suggest that I'm wrong, yet you insinutate the worst kind of foolishness. All you do is fall back on the classic ad-hominem manouever of associating the person you're debating with some other unpopular figure, and use that to ridicule them. Pathetic, and transparent to boot.

When you can stop calling names, let me know.

I would suggest a course in rhetorical ethics, with a side-dish of Habermass' "rhetorical fallacies" back to you.

4th June 2003, 02:10 PM

Originally posted by Segnosaur
You did it when you talked about economic cycles (using post WW2 germany as your counter example) and you did it when you talked about going to war.

I trust you meant WW 1?

And your additional ad-hominem is noted.

4th June 2003, 02:15 PM

Originally posted by aggle_rithm

We had deflation in the 70's? And that led to inflation?

No. We haven't had deflation since the Great Depression.

Why do you suppose the big businesses want this? Is there a conspiracy I'm not aware of?

Could you possibly be more disingenious?

No, we did not have deflation in the 1970's. Saying 'led to the 1970's" does not mean "in the 1970s" and no, we did not have deflation in the 1960's, either, but what we DID have was a low inflation rate preceeding the 1970's, basically a *lesser* version of what we see right now. The dollar's slide when we started to have a massive oil debt was the trigger then. This time it's a slide in the dollar that will cause more oil debt, and so on.

No, we haven't had deflation since the Great Depression. That, in and of itself, ought to suggest something to you.

Since we also didn't have deposit insurance and the Fed in the present form, either, then, I would submit that the 1970s' was the analog of a weak depression in the present system.

And we're headed into another one of those, no matter what you want to call it. The leading indicators are stronger, and we seem to be encouraging it headlong.

Why?

xouper

5th June 2003, 09:27 AM

jj: It's only you own imagination that created the dichotomy. I don't have to admit anything. Let me ask you: Why did you create the appearance of the dichotomy by your own words, when no such dichotomy exists. You'd think my position alone would be a counterexample to the two responses that you offered, wouldn't you?In the first place, they weren't my examples, they were yours. In the second place you seem to have lost track of my original question, since you haven't yet answered it. If I may refresh your memory:

jj: Why doesn't anyone care about that?

xouper: Who said people don't care about that?

jj: I guess you're right. Being in a state of denial isn't the same as not caring.

xouper: Are you now suggesting everyone is either in a state of denial or doesn't care?

jj: Are you trying to create the illusion of the fallacy of the excluded middle?

xouper: Are you admitting there are other choices than the two you have so far offered?

jj: It's only you own imagination that created the dichotomy. I don't have to admit anything.Your claim that I created the dichotomy is simply false. When queried about your intended meaning, you are the one who provided only two choices (so far). When asked a second time, you still haven't clarified your intended meaning.

You'd think my position alone would be a counterexample to the two responses that you offered, wouldn't you?Of course, which is why any reasonable person would automatically assume that you excluded yourself from your sweeping generalities. To do otherwise doesn't make much sense.

Which still leaves your implied assertion that everyone else doesn't care (or is in a state of denial). Do you intend to clarify that (or retract it), or will you continue to deflect attention away from it and hope no one will notice that you have been caught in an obvious overstatement of your case, an exaggeration that is typical of much of the rhetoric and grandstanding you have posted in this thread.

Perhaps you might wish to take some of your own advice here:

I would suggest a course in rhetorical ethics, with a side-dish of Habermass' "rhetorical fallacies" back to you.Like I said earlier in this thread, I respect many of your opinons on many other things, but in this thread you have done quite a bit of ranting and waving your arms in the air, rather than present a viable case for your position. I have come to expect better from you than this, but I guess we all have our pet issues that make us foam at the mouth. :)

5th June 2003, 09:56 AM

Originally posted by xouper
Like I said earlier in this thread, I respect many of your opinons on many other things, but in this thread you have done quite a bit of ranting and waving your arms in the air, rather than present a viable case for your position. I have come to expect better from you than this, but I guess we all have our pet issues that make us foam at the mouth. :)

Well, the "science" of economics is simply not well-formed enough to provide a full mathematical evaluation. Yes, I am aware of a lot of models. I'm also aware that they all break sadly at the drop of a hat (well, it's hard to model irrational behavior, which is what I would personally have to characterize both boom and bust in the stock market as, yes?), so there is no "hard data" here to look at, only trends and market/economic forces.

And the one we face now is seeing the currency slide, which WILL lead to inflation. Since there is so much money going into deficit service, there is not a lot for investment.

Just like the 1970's only worse.

I realize I am goring some people's oxen here, but the point holds, the people who voted for the Shrub are the ones who are going to take his economic results right straight on the chin.

Now, I can't blame the Shrub entirely, of course, it's a long-standing Republican tradition. Still, with the dummycraps so completely destroyed by the Republigun attempt to usurp the last government (that would be Mr. Bill) via false color of law (that would be the attempt to impeach on the most ridiculous of basis, well, based on ridiculous behavior by Mr. Bill, too), they (republiguns) are reaching heights that they haven't reached since the early 1900's, if ever.

We do recall how that worked out, don't we?

xouper

5th June 2003, 10:20 AM

jj: Now, I can't blame the Shrub entirely, of course, it's a long-standing Republican tradition. Still, with the dummycraps so completely destroyed by the Republigun attempt to usurp the last government (that would be Mr. Bill) via false color of law (that would be the attempt to impeach on the most ridiculous of basis, well, based on ridiculous behavior by Mr. Bill, too), they (republiguns) are reaching heights that they haven't reached since the early 1900's, if ever.Ranting/trolling like this undermines your position and isn't likely to change anyone's mind. And this is also why I won't bother debating these issues with you.

aggle_rithm

5th June 2003, 10:23 AM

Originally posted by jj

Could you possibly be more disingenious?

Well...I'll give it a try, if you insist. ;)

aggle_rithm

5th June 2003, 10:28 AM

After thinking about it, I can see how we could have stagflation fifteen or twenty years down the road, but it has nothing to do with current economic policy. It will happen because oil production will have reached its peak and begun to decline. Spikes in oil prices will lead to higher prices across the board, squeezing profits of most businesses and earnings of most consumers.

Something similar may account for the stagflation we had in the seventies -- the oil embargoes. But I still think it had a lot to do with high interest rates.

5th June 2003, 10:45 AM

Originally posted by xouper
Ranting/trolling like this undermines your position and isn't likely to change anyone's mind. And this is also why I won't bother debating these issues with you.

I simply reply that you're unwilling to face facts. So it goes.

5th June 2003, 10:51 AM

Originally posted by aggle_rithm
After thinking about it, I can see how we could have stagflation fifteen or twenty years down the road, but it has nothing to do with current economic policy. It will happen because oil production will have reached its peak and begun to decline. Spikes in oil prices will lead to higher prices across the board, squeezing profits of most businesses and earnings of most consumers.

Something similar may account for the stagflation we had in the seventies -- the oil embargoes. But I still think it had a lot to do with high interest rates.

You're getting there. Oil prices are going to go up on average, because of the currency decline. We may or may not see some political-action shortages (I hope not) which will in fact make things much worse :(, but let's hope not.

When the basic cost of oil goes up, so will the cost of other forms of energy, because "they can". Basically, nearly everything tracks energy cost, so an increase in the average cost of energy is going to map directly into everything else, from food to housing, and the energy cost of keeping older houses going is going to put another nasty wedge into the available funds of the folks with fixed and lower income, squeezing their funds at the same time they face inflation. This will drive up interest rates. So now we have the interest rate problem.

We have very little capital investment right now, rather we have CEO's and shareholders alike pulling out as much money as they can, so we are not seeing development of new businesses and new products.

The first (energy cost) gives us inflation, the second (no new capital) stagnation. If you're right and we start to run short that soon (I still have my doubts about that, but one never knows), it will only be a great deal worse in my opinion.

The burst of capital investment we saw for a while (not that large, either) fueled a lot of the last "bubble". the lack of it is only going to extend this recession. (Is it a depression yet, with the threat of deflation around the corner?)

xouper

5th June 2003, 11:02 AM

jj: I simply reply that you're unwilling to face facts.Non sequitur. Such a claim has no basis in logic or fact. Just because I disagree with your position and decline to engage in debate (on the grounds that you are trolling), does not at all imply that I am unwilling to face any facts. That you would make such a ridiculous claim about me just proves that you aren't interested in debating, but just want a soapbox to run your mouth. Well, carry on.

Segnosaur

5th June 2003, 11:45 AM

Originally posted by jj
Gosh, you made a completely unjustified supposition, and launched off into outer space. You built the straw man, and you burnt it. You can say it's NOT one until the crows stop landing on it, man, it doesn't matter.

...

This after all of your ad-hominem about how I can't write? It's simple, man, like I SAID ABOUT 14 TIMES, the present economic policies are going to push people down out of the middle class. Gosh, seems like enough other people have been upset by that that it's not my writing that's the problem, here.

Ok, you do notice you contradict yourself all over the place.

In an earlier posting, you said "You made up the idea that I was talking strictly about the Bush administration from whole cloth. That's as straw-man as straw-man gets." (Of course, I have no idea what you mean by whole cloth, but given your habit of posting things that make no sense, and not explaining yourself, I'll let that slide.)

Then you say "the present economic policies are going to push people down".

Do you recognize the inconsistency? How can you complain that I was assuming you were talking about Bush, and then talk about 'current economic policies'? Or do you somehow think that the Bush isn't responsible for his own policies? Or perhaps you think ALL presidents (both Democrats and Republicans) are to blame.

Originally posted by jj

When it gets down to creating new, decent jobs, the lag is longest, the worker is on the butt end of the cycle. First you have to develop a new business, then you have to get it going, then you start to manufacture, and THEN you get jobs.

And the president is to blame for that, because why?

The speed at which new jobs are created varies. Sometimes Jobs are created relatively quickly. Other times, we have a 'jobless recovery'. (Some suspect that we are in that type of situation now.)

Either way, the govenment can't magically say "poof, make jobs appear immediately". The best they can do is create a climate that will allow the economic recovery to begin. Cutting taxes is just one such measure. Lowering interest rates is another.

Originally posted by jj

The most 'pathetic' thing here seems to be your understanding of economics. I suggest courses in micro or macroeconomics.

Pure ad-hominem only pisses off the opponent. You're starting to succeed.

Then my work is done here.

Just curious... What economics background DO you have?

Originally posted by jj

Rule 1: Some inflation is necessary. It is through inflation that the costs of labour, raw materials and final product are balanced at a fair point

Dogma is great, isn't it? The mathematics is another story. Certainly you cite one possible and very common scenario. It works, but you're resolutely ignoring half of the issue. Why?

Rule 2: Even a 'small' rate of inflation will look big, given a 'long enough' time.

Why do you keep leaving out the comparison with the ROI? Inflation is HALF the story.

First of all, its not 'dogma', its basic economic theory, just like supply and demand curves, etc.

Secondly, the reason I left out ROI is because it is largely irrelevant. (Or, more appropriately, it is part of overall prices, such as the price of borrowing or lending money.) In any case, interest rates usually keep up with (and exceed) inflation.

Originally posted by jj
It's a fact. The president was put into office (I won't quibble with people about the term "appointed") by a court. It's true, it's simple, and it's fact. The court decided the election. It's a fact. If you don't accept that, you didn't read the news, or you're simply malicious.

The court did not 'decide the election'... people voted, there were problems, and the court had to make rulings based on their interpretation of the law. (And again, 'recounts' sponsored by various news organizations showed that Bush would have carried the state in the end anyways.)

You may not like the fact that Bush won because you disagree with his policies. You might not like the whole electoral process. You may not like the fact that Gore lost even though he had a higher portion of the overall popular vote. But they followed the rules, and there WILL be another election later on. (Heck, I don't like the fact that the Canadian prime minister gets into power with only 40% of the popular vote, but its the system we have to live with here.)

If Gore had carried one or 2 other states, he would have won the election.

Originally posted by jj
Michael Moore is irrelevant. (In my opinion, to nearly everything.) It's odd that you'd bring up the current neo-conservative whipping boy when nobody else has. I wonder why? Oh, I know, you want to suggest I agree with him somehow. Gosh, could it be, PROPAGANDA!?

Could be propaganda. But in this case, it that you were using similar rhetoric to that used by Moore during his speach. If I've implied incorrectly that you use him as your sole information source, I'm sorry, but you ARE making the same arguments as him.
Originally posted by jj
Until we can get to the point where you don't unethically, immorally, and dishonestly call people who disagree with you " ... school of brain damaged thought ..." there will be no discussion to be had.
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And until you can make a post that actually a) provides evidence, b) actually states things clearly at the start, and c) doesn't contradict postings you made earlier, I'll consider to question your thought processes.

Originally posted by jj
You have no reason, authority, or evidence to suggest that I'm wrong, yet you insinutate the worst kind of foolishness. All you do is fall back on the classic ad-hominem manouever of associating the person you're debating with some other unpopular figure, and use that to ridicule them. Pathetic, and transparent to boot.

When you can stop calling names, let me know.

Ok, here's what I find ironic... You accuse me of attacks, and say that I call you names. I admit, I am doing that.

Yet you make insinuations that are just as bad... you say I have no "authority" to say you're wrong, you accuse me of not doing research.

And I have provided evidence to show you're wrong on a lot of points. You just refuse to understand it.

Perhaps if you actually made points I wouldn't ridicule you, and might (dare I say) respect your points while still disagreeing. I respect Malachi151 for doing so.