So let me get this straight though. You agree that austerity is bad in a recession. But you also believe nothing the government does helps a recession. These two ideas cannot co-exist. Either I'm mischaracterizing what you said or you don't really believe one of those things.
Nor is it in any way inconsistent with saying that short term fiscal policy, overall, is ineffective in the long run.
Have most of the "austerity measures" even gone into effect yet? And don't a lot of their measures also include raising taxes?Originally Posted by flea
Last edited by gcoll; 12-09-2012 at 12:32 PM.
No where in history has your presumptive scenario been attempted.
Even under the circumstances youd like to paint with the idea, it ONLY bears fruit under a controlled enviorment.
If you give a million poor people, one million dollars , you are assuming, that "prices" will adjust. You have no factual evidence to support that. None what so ever.
Competition still exisits. Under the Bush administration, due to the continued deregulation of the banking sector, we saw the creation of more Millionaires then ever before.
This did not artificially inflate prices in the least.
Now although it is a little tangental (which youve made cear many times ,seems to put you out of sorts)The Bush Administration touted this fact , while ignoring that as Ive pointed out,the available wealth at any given time is finite, so those new "millionaires" fortunes didnt materialize out oif thin air, for people to become wealthier, others lose wealth.
Supply siders always talk as if there is a magical stream that wealth is created from, there is not.
So when you say that, you are basing it on the "theroies" of supply side economics, that are only valid under strict compliance to expected behaviours which are NEVER the case.
Additionally, you are assuming that with that Million dollars, the poor should(and need to ,to satisfy your model). spend ever penny on consumption and be back in the same boat that they started in.
Again, there is no historical basis for this claim.
Why couldnt they start a buisness with it like the "good" wealthy person might? Why couldnt they invest it like the Good wealthy person?
Again for your model to bear out people must conform to controlled behavior.
And lastly ,you seem to under the misperception that the Redistribution of wealth is strictly a matter of an economic model, it is not.
It is only half of the equation, the other half is limiting the unfettered manipulation of the market that having a great deal of power allows.
Much in like how we break monopolies so as to protect from them holding to much control in the market,plutocrats have the same power and excercise it ALL the time.
Much in the same vein as Ive attempted to get people to understand that a coprporation is little more then a defacto branch of the government having power and influnce over policy, so to are the plutocrats having so much disposable wealth available to buy influence and power to shape legislation to further benefit themselves as is evidenced by the comments made by Sheldon Adelson which Ive provided In the 49% thread.
He doesnt care one wit about, gay marriage, or gun control, hes pro choice, and wants socialized health care...but he votes Republican in an effort to crush unions and pay less taxes. When Rs win ,in any level of governance he uses his wealth to craft legislation that has little effect besides benefitting him personally at the expense of millions of others.
The short term benefit of stimulus, is not diminished by long term effects because it is not a long term goal, it is as the term suggests, a short term initiative to jump start spending, which in turn increases revenue.
Without spending, there is no job creation, without more jobs ,you will never increase revenue.
This increased taxation is a small measure towards a more appropriate balance.It will not effect anything other then producing a slight increase to revenue, the Economy, as it always has will GROW in response to these efforts(as it clearly has since Obamas term began) and supply siders will spin out some outside reason to disavow why their thinking was trumped.
Because I agree that many of the tenets of austerity are exactly what should be pursued during healthy economic times. But I also think that perpetual unemployment is not just a short-term harm - it casts a shadow over the long-term on growth. Additionally, we had a credit crisis that still hasn't shaken out yet and many believe (convincingly) that more harm is to come unless it's mitigated. Perpetual debt on a microeconomic level is even more harmful than public debt (which actually is healthy when it's reasonable).
I'm not really an expert but I know a lot of services have been cut, those nations are seeing huge level of unemployment and levels of unemployment under 30 that reach 50%. At least part of the austerity response to a crisis is "do nothing" before they cut more, and that's what the drag has been (so many economists argue).Originally Posted by gcoll
^ yes they have, Spain, England,and Greece have all but abandonded them completely.
Greece has been forced to continue some of the measures due to the complete insolvency they faced, not becaue they were having the desired effect.
But you touch upon an interesting idea flea, and it is one of the cornerstones of the great capitalist lie.
why indeed is it that it always has to bee one way or the other?
The simple answer that is entirely obvious is that it doesnt.
So then why is it always presented as such?
To keep people arguing, top keep us polarized and divided, and angry, and upset, people are distracted when they are emotional, people will cut off their noses to spite their faces, this allows for all the "fun and games' with the revenue that keeps the eliye on top.
All this debate is is whether or not the richest Americans will have their taxes raised by 3%. That's it. Doing so will neither "punish job creators" nor "destroy our economy".
...but from even the most casual observer's point of view, we've seen over a decade with "trickle down" economic theory. Common sense tells us that if we try something and it does not work, then it's time to try something else.
This is one of my biggest problems with the tax code and the whole we shouldn't punish the job creators BS. There isn't a level playing field when a huge corporation can funnel income through Bermuda and not pay taxes on billions of dollars or revenue.
My small business can't do that.
Well that's only partial cab. For instance, a company can expand but if taxes are limiting how high they can expand they will do only partial expansion or do it with used equipment which does little to the manufacturing part of the economy. We saw this with accelerated appreciation, at various times in the past 10 years, with 2011 year end being the last time. I had a few customers who opted to buy new from me because of that as opposed to getting older technology but still in better shape then their current equipment.
While tax treatments can make some things more interesting, what they really are is an expenditure to subsidize that business hiding under a special treatment disguise. This is exactly what Alan Simpson has popularized as a tax expenditure. I am not on principle opposed to a subsidy if there is a good public interest.
Back to your first section, income and capital gain taxes are on profits. They are not limiting factors. The profit (or lack to be more specific) is the limiting factor.
Here is the question of the day, does anyone think that wealthy people should pay a lower percentage of their income to taxes than middle class people? Don't argue tax brackets, just a simple question. Do you think someone earning 46 million dollars should pay a lower percentage of their income than say someone earning sixty thousand?
^ that would be a really great place to start GM...my only concern would then be something I think weve disscussed before, I have no faith in the compliance of people, or companies in regaqrds to any rules, laws, or Guidelines.
There are some with great integrity, and there are way to many that lack it, the system always get manipulated,twisted,abused.
police corruption was the rule rather then the exception for 150 years.
Politcians have always abuswed their power, wealthy people have always leveraged their wealth to screw the poor...redistributing their gains IMO is the only way to keep them honest.
I think that instead of re-engineering the system to try to get the outcome you want it would be better to work on improving transparency. When you impose taxes, rules and regulations that treat people differently you open the door for obfuscation, noncompliance, avoidance, and abuse and who has the best access to the lawmakers making these taxes, rules and regulations? Not you or me.
That's why the government doesn't represent the people any longer. Who is an elected politician going to listen to, the grandmother who sent him a $200 check for his election or a corporation that gave him $80,000? When a handful of corporations are funding their campaigns, you better damn well believe they expect to be paid back.