OK, for those who don't want to listen to this incredibly boring and self loathing guy, let me summarize. Tax the rich and give it to the middle class so they go out and buy the stuff the rich make. Overnight, you will solve unemployment. Problem is if this was such a great idea, Obama would have done it by now. Remember just a year ago he was defending the Bush tax cuts.
This is the kind of video that people eat up or spit out depending on their political views. As a matter of economic reasoning it is a shambles IMO.
Who creates jobs? Those who invest in ventures to provide something that requires workers to provide them. He's saying that consumer demand funds the creation of jobs. That's fine. But who is going to meet consumer demand? Again, the people who invest in ventures which will employ people to provide that consumer with that good or service. When will more jobs be created? When the people in charge of providing these goods or services feel it is profitable to do so. If you tax their gains, they will think again about wanting to keep their business in your locale because you are making business less profitable for them. If you put a tax on their production costs, they're not paying these anyway - they just push this increment onto the consumer in the form of higher prices or pay less money to their employees or cut the number of employees. It ultimately hurts the consumer more as well as stifling job creation.
Taxing the rich to invest in what? The speaker seems to suggest that the government should be in charge. This, to me, is one of the stupider ideas I've heard. How can they possibly predict what people want or how it should be produced? Moreover, it is incredibly dangerous to let the government do this. They have far lesser risk involved - they will tax for their shortfall. They won't have the same free-market incentives to make products cheaper with higher quality. They'll have a blank check and be lazy - just look at the other Depts and programs with rising costs and budgets - and they'll distort the market and the competition to push for innovation.
Individuals - including the superrich or supersmart - spend their lifetimes trying to guess what people want. They bare the risk, the consumers get the benefit. They make money when they make consumers happy. You want a lot of jobs? Take away as many taxes as possible and reduce the size of government. Put the dollars back in the hands of the middle-class and let them spend it to create the demand which will in turn create the necessity to create jobs to supply this demand. They may even get into business for themselves and become rich.
Who creates jobs? Those who invest in ventures to provide something that requires workers to provide them. He's saying that consumer demand funds the creation of jobs. That's fine. But who is going to meet consumer demand? Again, the people who invest in ventures which will employ people to provide that consumer with that good or service. When will more jobs be created? When the people in charge of providing these goods or services feel it is profitable to do so. If you tax their gains, they will think again about wanting to keep their business in your locale because you are making business less profitable for them. If you put a tax on their production costs, they're not paying these anyway - they just push this increment onto the consumer in the form of higher prices or pay less money to their employees or cut the number of employees. It ultimately hurts the consumer more as well as stifling job creation.
Taxing the rich to invest in what? The speaker seems to suggest that the government should be in charge. This, to me, is one of the stupider ideas I've heard. How can they possibly predict what people want or how it should be produced? Moreover, it is incredibly dangerous to let the government do this. They have far lesser risk involved - they will tax for their shortfall. They won't have the same free-market incentives to make products cheaper with higher quality. They'll have a blank check and be lazy - just look at the other Depts and programs with rising costs and budgets - and they'll distort the market and the competition to push for innovation.
Individuals - including the superrich or supersmart - spend their lifetimes trying to guess what people want. They bare the risk, the consumers get the benefit. They make money when they make consumers happy. You want a lot of jobs? Take away as many taxes as possible and reduce the size of government. Put the dollars back in the hands of the middle-class and let them spend it to create the demand which will in turn create the necessity to create jobs to supply this demand. They may even get into business for themselves and become rich.
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The assumption that the rich create jobs with their money is on very shakey grounds when you consider that most of them keep their money in tax havens and spend it on boats and villas. No one ever addresses the issue that the vast majority of the money is never invested in ventures and jobs.
The way to get the economy going is to put money in the pockets of ordinary people. The health of the economy depends on the ability of the middle and low classes (who form the majority of the society) to spend on variety of goods. These are the ones who go out there and spend to keep the high street buzzing and small businesses ticking over. If you squeeze them with austerity measures, pay freezes and job cuts while energy and food prices and everything else keep on rising, you are creating a recession.
The way to get the economy going is to put money in the pockets of ordinary people. The health of the economy depends on the ability of the middle and low classes (who form the majority of the society) to spend on variety of goods. These are the ones who go out there and spend to keep the high street buzzing and small businesses ticking over. If you squeeze them with austerity measures, pay freezes and job cuts while energy and food prices and everything else keep on rising, you are creating a recession.
so Flint/Kaz, what is the solution in your opinion?
If the economy is allowed to continue as it is, the top 1% will continue amassing more percentage of hte wealth. Right now, they own 42% of the wealth. We can see then owning 60% in the next decade or so. Obviously, there is no way that the 1% will be able to spend that much as the video suggests. So, it will hurt the economy. This is the samething that Obama and Buffet have been saying.
I assume our Republican friends here would prefer that the top 1% continue to grow richer, taking more percentage, and then use police and force to battle the occupiers as they continue to grow due to lack of distribution of the money and ability of the 1% to spend that much money. Especially since, the wealthy also moves the money to the emerging economies overseas.
I dont want to see a dictatorship here in the US due to this. It is great to see the smart wealthy that see past their own pockets.
If the economy is allowed to continue as it is, the top 1% will continue amassing more percentage of hte wealth. Right now, they own 42% of the wealth. We can see then owning 60% in the next decade or so. Obviously, there is no way that the 1% will be able to spend that much as the video suggests. So, it will hurt the economy. This is the samething that Obama and Buffet have been saying.
I assume our Republican friends here would prefer that the top 1% continue to grow richer, taking more percentage, and then use police and force to battle the occupiers as they continue to grow due to lack of distribution of the money and ability of the 1% to spend that much money. Especially since, the wealthy also moves the money to the emerging economies overseas.
I dont want to see a dictatorship here in the US due to this. It is great to see the smart wealthy that see past their own pockets.
Taxing the rich wouldn't even be putting a dent into the debt. First you need to realize that the government will not use the additional income to anything useful. Secondly, the way to end this crisis is not through increase in tax but a decrease in spending. Both Bush and Obama have been out of control with SPENDING. You add additional tax dollars to their pockets and they will just as well spend that money on some other stupid stuff. After all, you are talking about government, there is no accountability and there is no transparency. So you guys can discuss this issue to death but this is a political maneuver and not really a solution.
The solution? Lower taxes or eliminate them for all and greatly reduce government spending. Making it open and above board that everyone is playing with the same rules and getting the same benefits. The more regulation people attempt to put up the greater it tends to benefit the big corps/the rich for they basically write the rules. Making it hard to compete with them, and for them to gain even more benefit at the expense of the common man. Just look at the bailouts; private banks were bailed out by every citizen. They have no more reason to be bailed out than McDonalds' does. The people feel justifiably upset about the 1% on those terms; however, many, especially on the left, push for policies that just worsen their plight.
This whole spiel the left love to play about how the Rs help the 1% is inane - the Ds do it just as much if not more. At the moment, people have borrowed to their gils and it is simply an inevitability that they will have to go through some pain. The 'austerity measures' are the only real ways of getting back to real wealth. Borrowing and borrowing more money on top of that is a sure-fire way to bring the whole ship down. If you have debt, you can't keep charging your credit card. You have to start saving and cut spending, and that may hurt but that is the only way. You have to get back to reality eventually; people have to be responsible. The more you think the government can pay for you the worse off you are: they will tax you more to cover the costs of more programs and departments and when they run short they'll print money which effectively is another hidden tax which affects your purchasing power - meaning you will not be able to buy the same amount of milk for the same price (inflation). And worse, as tajrish touches on, government is a notoriously bad spender and rising costs are almost guaranteed - which means even less money for the ordinary man. This is just a cycle of welfare and poverty.
If people keep getting richer and they spend less of that as a proportion on investing then that is their initiative. But it is to their detriment; other people will take up the slack in new and evolving markets and they will get the benefits/profits instead.
The real issue is that the game is fixed and that is why there is an element of unfairness. Otherwise, if all else were equal, it is nobody's business that one person makes much more than they do. That person is meeting the need and/or want of the rest of society to the point that they can afford to live luxuriously. The benefit of that is that such a person will undoubtedly be involved in some venture which employs other people and in that sense helps the economy. These people are doing a good thing in the end, no matter how frivolous people want to paint them. In the end, unless coerced with government force, it is simply a person meeting the demands of other people in society. They don't need to pay their "fair share" as they already are by providing goods and services and, consequently, jobs.
This whole spiel the left love to play about how the Rs help the 1% is inane - the Ds do it just as much if not more. At the moment, people have borrowed to their gils and it is simply an inevitability that they will have to go through some pain. The 'austerity measures' are the only real ways of getting back to real wealth. Borrowing and borrowing more money on top of that is a sure-fire way to bring the whole ship down. If you have debt, you can't keep charging your credit card. You have to start saving and cut spending, and that may hurt but that is the only way. You have to get back to reality eventually; people have to be responsible. The more you think the government can pay for you the worse off you are: they will tax you more to cover the costs of more programs and departments and when they run short they'll print money which effectively is another hidden tax which affects your purchasing power - meaning you will not be able to buy the same amount of milk for the same price (inflation). And worse, as tajrish touches on, government is a notoriously bad spender and rising costs are almost guaranteed - which means even less money for the ordinary man. This is just a cycle of welfare and poverty.
If people keep getting richer and they spend less of that as a proportion on investing then that is their initiative. But it is to their detriment; other people will take up the slack in new and evolving markets and they will get the benefits/profits instead.
The real issue is that the game is fixed and that is why there is an element of unfairness. Otherwise, if all else were equal, it is nobody's business that one person makes much more than they do. That person is meeting the need and/or want of the rest of society to the point that they can afford to live luxuriously. The benefit of that is that such a person will undoubtedly be involved in some venture which employs other people and in that sense helps the economy. These people are doing a good thing in the end, no matter how frivolous people want to paint them. In the end, unless coerced with government force, it is simply a person meeting the demands of other people in society. They don't need to pay their "fair share" as they already are by providing goods and services and, consequently, jobs.
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Dude, you lived in Europe yourself. I mean, I'm just saying. There are many things money could be spent on and even more importantly, there might just be a correlation between the drop in intelligence in the United States among poor people and the fact that government spending has been cut ever since Mahroom Hazrate Ronald Reagan decided to just do that.
Greece, UK, Ireland, Spain...they all have been cutting spending recently. Works like a charm.
Now anyway, to the point of paying taxes and what government spending is good for....lots of things government might have an interest in to work well and private organisations won't have the incentive...education as an example, security would be the other...etc.
Greece, UK, Ireland, Spain...they all have been cutting spending recently. Works like a charm.
Now anyway, to the point of paying taxes and what government spending is good for....lots of things government might have an interest in to work well and private organisations won't have the incentive...education as an example, security would be the other...etc.
So there's asymmetric information in everything, what's your point?
There's probably a bigger correlation with the increase in spending in the DoE and lower grades.
It doesn't work like magic, it is real world stuff. You've overspent, you stop overspending. The fact that these countries got into their holes by socialistic policies and reckless monetary/fiscal policy is just another nail. They've also relied far too much on tax increases which are not proper austerity measures.
Unfortunately, as well as causing great deficits and debt, the socialists also have the cheek to act as a solution: more spending and debt.
Education? No. Education has existed for eons and will exist in the future in the private realm. Defence, police, courts, those are things governments need to be in. They're a far cry from FEMA, TARP and the DoE.
There's probably a bigger correlation with the increase in spending in the DoE and lower grades.
It doesn't work like magic, it is real world stuff. You've overspent, you stop overspending. The fact that these countries got into their holes by socialistic policies and reckless monetary/fiscal policy is just another nail. They've also relied far too much on tax increases which are not proper austerity measures.
Unfortunately, as well as causing great deficits and debt, the socialists also have the cheek to act as a solution: more spending and debt.
Education? No. Education has existed for eons and will exist in the future in the private realm. Defence, police, courts, those are things governments need to be in. They're a far cry from FEMA, TARP and the DoE.
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I guess most people here didn't even understand what the guy was saying.
First of all, this past recession created all sorts of DEMAND issues. When there is a lack of DEMAND for products and services no matter how much you cut taxes on rich people - they will not invest because they are not stupid. Any rational economic person would only invest when there is demand for the goods or services they are thinking about offering. No matter how much gas you put into a car it won't go anywhere if there are no roads.
Secondly, the concept of the virtuous cycle seemed to have gone over the heads of many. If you tax the rich and in turn decide to reduce taxes on low income and middle class workers - which is what Obama has been trying to accomplish - what will happen is the following - Say the $1 of tax that was taken from a rich person (that would have most likely gone unspent) via tax increases and given to the middle class person via tax decreases will most likely be used to purchase something as middle class and lower income families tend to spend a larger share of their wallet consuming stuff. That $1 spent will have a multiplier effect depending on how it is spent but it will most certainly be higher than 1. Meaning- $1 spent at the bakery, will be spent at the butcher's shop by the baker, and the butcher will use that $1 somewhere else - creating demand and consumption along the way. In turn all the businesses that are experiencing this cycle of consumption will be more willing to HIRE people to meet this new demand.. This is what the virtuous cycle is about.
The right wingers and republicans have been using a bunch of fairy tales and nonsense about taxes and spending to fill the brains of unaware people. I can't people how many supposedly educated people are falling for this crap these days.
First of all, this past recession created all sorts of DEMAND issues. When there is a lack of DEMAND for products and services no matter how much you cut taxes on rich people - they will not invest because they are not stupid. Any rational economic person would only invest when there is demand for the goods or services they are thinking about offering. No matter how much gas you put into a car it won't go anywhere if there are no roads.
Secondly, the concept of the virtuous cycle seemed to have gone over the heads of many. If you tax the rich and in turn decide to reduce taxes on low income and middle class workers - which is what Obama has been trying to accomplish - what will happen is the following - Say the $1 of tax that was taken from a rich person (that would have most likely gone unspent) via tax increases and given to the middle class person via tax decreases will most likely be used to purchase something as middle class and lower income families tend to spend a larger share of their wallet consuming stuff. That $1 spent will have a multiplier effect depending on how it is spent but it will most certainly be higher than 1. Meaning- $1 spent at the bakery, will be spent at the butcher's shop by the baker, and the butcher will use that $1 somewhere else - creating demand and consumption along the way. In turn all the businesses that are experiencing this cycle of consumption will be more willing to HIRE people to meet this new demand.. This is what the virtuous cycle is about.
The right wingers and republicans have been using a bunch of fairy tales and nonsense about taxes and spending to fill the brains of unaware people. I can't people how many supposedly educated people are falling for this crap these days.
There are some inaccuracies:
- Not all investment is demand driven. In fact, it is argued that long-term investment is concerned with supply.
- This Keynesian fantasy might work if America had walls across it's border and money never left. Or, there was no FED. There is a failure to consider that there is a negative multiplier going on here, otherwise we would all be billionaires by now because the above assumes the multiplier effect works perpetually. It is also a simplistic view of the world which serves to take from the productive areas of the economy to help the unproductive parts - a philosophy which on the whole is a failure in terms of stimulating activity. In the end, you're dissuading the producer to produce when you are then giving his productive efforts to the consumer. Nations that are largely based on consumerism aren't productive - the opposite, you need to incentivise production. You're just using this as an excuse to redistribute wealth.
These are old Keynesian fairy tales sold to you inbetween commercials.
70 years ago not everyone had a car either.
Right now, the DoE in America spends more than the entire budget of several nations combined while people get dumber. It is not an argument for Education being provided by the government. In fact, it's one of the areas where this argument is the weakest.
I haven't denied we live in a world with asymmetric information. That buyers and sellers possess unequal information is a given. I deny that this argument is in itself a reason for government intervention. This is where you and I part. You think the government and the bureaucrats are intelligent enough or have the moral authority to decide for everyone else's best interests. I don't and history shows they don't. Asymmetric information exists all the time. We are talking about a free market, not a perfect market.
Right now, the DoE in America spends more than the entire budget of several nations combined while people get dumber. It is not an argument for Education being provided by the government. In fact, it's one of the areas where this argument is the weakest.
I haven't denied we live in a world with asymmetric information. That buyers and sellers possess unequal information is a given. I deny that this argument is in itself a reason for government intervention. This is where you and I part. You think the government and the bureaucrats are intelligent enough or have the moral authority to decide for everyone else's best interests. I don't and history shows they don't. Asymmetric information exists all the time. We are talking about a free market, not a perfect market.
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Whoosh.
You refer to the fact that not everyone had education in the past. Well not everyone could afford education. So you are insinuating that the government allowed this to happen. I named something that now every person can pretty much afford with the government not paying for everyone to have it. It is a retort to the argument that unless the government provides the service no one else will. The irony is that there are pubic schools and yet private schools still thrive. Even worse, govt. got so involved tuition fees are crazily expensive now.
You refer to the fact that not everyone had education in the past. Well not everyone could afford education. So you are insinuating that the government allowed this to happen. I named something that now every person can pretty much afford with the government not paying for everyone to have it. It is a retort to the argument that unless the government provides the service no one else will. The irony is that there are pubic schools and yet private schools still thrive. Even worse, govt. got so involved tuition fees are crazily expensive now.
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Why am I debating this?
1) you can live without a car very easily, specially if other means of transport are available. A kid in Manhattan as an example can grow up with never driving a car and nothing will happen. A kid growing up in Manhattan however who isn't provided with the necessary education...well...I really don't know about that. One is a luxury, could be necessary but not really, consumption etc. product. the other is a necessity, not-for-profit at least not directly thing.
2) Aehm, I really don't know...schools were over 90% provided by the public, the other 10% are divided between churches and philanthropy, at least worldwide. In the US there are charter schools which until today I really don't know how they work but...YES? At least given that around 90% of the world's population went through a public school system that would be the point of it.
Besides, school is not about money but about incentives. There are enough experiments in the US as an example that try to improve incentives for both students and teachers to be better and it actually works. And incentive is the key..
3) 70 years ago cars were not a mass product yet, just as the internet wasn't. Hence the argument that not everyone had internet is just as relevant to this discussion as not everyone had a car.
1) you can live without a car very easily, specially if other means of transport are available. A kid in Manhattan as an example can grow up with never driving a car and nothing will happen. A kid growing up in Manhattan however who isn't provided with the necessary education...well...I really don't know about that. One is a luxury, could be necessary but not really, consumption etc. product. the other is a necessity, not-for-profit at least not directly thing.
2) Aehm, I really don't know...schools were over 90% provided by the public, the other 10% are divided between churches and philanthropy, at least worldwide. In the US there are charter schools which until today I really don't know how they work but...YES? At least given that around 90% of the world's population went through a public school system that would be the point of it.
Besides, school is not about money but about incentives. There are enough experiments in the US as an example that try to improve incentives for both students and teachers to be better and it actually works. And incentive is the key..
3) 70 years ago cars were not a mass product yet, just as the internet wasn't. Hence the argument that not everyone had internet is just as relevant to this discussion as not everyone had a car.
Your Ayn Rand fantasy is working so well in Somalia. No gubment, no taxes, bidness thrivin'. If we had your way we would all be pirates. In retrospect, here is a hilarious article from 2001.
http://www.theatlantic.com/past/docs/issues/2001/05/maass.htm
If we had appropriate regulations against tax cheats doing business in America, none of them would ever dare thinking about taking their money elsewhere. Here is a fact, even if our tax rate for the super rich was 50%, all the capitalists in Australia would still want to come to America to do their business because despite the republican assault on the middle class, there is still no society with as much disposable income as America's. You would have to be a complete fool not to want to do business here. The shame is, without Reagan voodoo economics, we could have had a much greater edge today.
http://www.theatlantic.com/past/docs/issues/2001/05/maass.htm
If we had appropriate regulations against tax cheats doing business in America, none of them would ever dare thinking about taking their money elsewhere. Here is a fact, even if our tax rate for the super rich was 50%, all the capitalists in Australia would still want to come to America to do their business because despite the republican assault on the middle class, there is still no society with as much disposable income as America's. You would have to be a complete fool not to want to do business here. The shame is, without Reagan voodoo economics, we could have had a much greater edge today.