Re: The Stimulus Package
 

Bond, I disagree with everything you just said. If the economy is going so great here, why do we owe money.. and more importantly why are we even borrowing money from other countries? (<< You could ignore the rest of this post if you want, the only thing I want is a clear answer to this question )

And no, this isn't an issue that just started 4-6 months ago. Its been like this.

And no again, I made no reference to banks to why I think the bailouts are bad. I'm more focused on the buisnesses that are taking them which are by a LONG shot not all banks. These companies are in it to make as much money as possible, as my Ford example showed, they're willing to lie and say things are going bad to get more free handouts from the government, but when they'd personally have to take a pay cut their whole story changed.

Companies are also trying to find loop holes and make up incentives for their leaders without calling it bonuses.

Like I said once again, I refuse to take middle ground. Either the strategy we have isn't working and something major needs to change, or the american capitalism project is failing.

Re: The Stimulus Package
 

Game, the reason why we are in debt is the same reason a family can be in debt: They spend more than they take in and live above their means.

I'm having a hard time understanding why people seem to be confused regarding how our country makes money, especially after seeing those charts Bond posted.

Government revenue is related to the nations GDP, not how it taxes it's people. As the charts show, increasing taxes on the rich does NOTHING to increase tax revenues. Instead, a government that does more to increase GDP increases its tax revenues. Progressive taxes have nothing to do with it.

Increase GDP = Increased revenue. Decreased GDP = Decreased revenues.

So a government should do more to increase GDP as a means to increase its revenue. I fail to see how punishing businesses that make over $250,000 a year, reducing tax exempt charitable donations and raising capital gains taxes accomplishes this goal.

And to say that capitalism has failed, or even to call it a project, is myopic thinking. Capitalism is what is the NORM, not the experitment, and it has been the norm since man first began bartering beads for animal pelts. Socialism is the experiment and it's the experiment that has FAILED every time it's been attempted from the USSR to FDR to LBJ to Castro's Cuba. European nations that have socialist constructs live with normal unemployment rates raging from 9-13%.

I can see where you're coming from, but I also believe you're letting the myth of "perfect" get in the way of the achieveable "good". Is capitalism perfect? No, but to this point in history it's the only system that has been proven to actually work on a large scale. There have always been crashes and recessions, but they've also always been followed by priods of growth that far exceeded the previous crisis.

http://futurist.typepad.com/my_weblo...ock_marke.html

IMO, recessions are overall necessary for continued growth. Like any environment, homeostasis is achieved by the ability of an environement to weed itself. Organisms that are sick or weak will be consumed during this process, but in the end the best run and most healthy organisms live and prosper. When this is allowed to happen, we go through terrible pain, but in the end always end up back on track and pushing to new heights.

The problem comes when natural selection is interfered with, and the entire process is extended through interference. Sick companies are not being allowed to die or be consumed by healthy ones, nor are they being forced to fundamentally heal themseves by changing the nature of their business. They are simply on life support hoping their cancer will just go away.

IMO, if we want to see the quickest recovery possible, the government needs to clearly state when they will NOT provide assistance or bailouts, so that these companies can feel comfortable in making moves confident that the government will not step in change their business environment. Billion of private dollars will need to be risked tfor companies to recover, but I can't see these companies taking that risk not knowing the totality of what the government will and will not do.

Re: The Stimulus Package
 

Proffessor as a big lurker in these types of threads I woul just like to commend you on your ability to clearly explain these complex matters in a calm way. *high five!*

Re: The Stimulus Package
 

Well thank you. I have tried very hard over the years to deminish my tendency to turn unto a flaming asshole whenever I come across someone I fundamentally disagree with.

I credit Dennis Praeger for enlightening me and Jason1 for testing that enlightenment ;)

Re: The Stimulus Package
 

The Government makes money in 2 ways: Taxes or borrowing it. End of discussion. No more big words, stupid graphs and charts, or conservative mind tricks.

One of my Professors put this situation in a good way (not the same one I was talking about earlier). He said this:

"In this situation, its better to be too agressive that not agressive enough"

That pretty much sums up my view of the stimulus.

Re: The Stimulus Package
 

I give up.

I have tried to concisely and quantitatively explain economic concepts, and it just seems they're met with the same warped responses and views.

This is like banging my head against a brick wall.

Maybe I'll start another thread with a fresh start some time in the future.

Re: The Stimulus Package
 

I agree with you (hence my comment a few posts up about no one listening to the numbers). Although I've been reading everyone's posts with great interest. And I'm enjoying Prof S' sense of humor.

I enjoy the Postal Service. Nice avatar.

Re: The Stimulus Package
 

1) You don't make money by borrowing it, you end up owing more than you borrowed because of interest.

2) The government also makes money via tariffs, and no, they are not the same as taxes as we normally think of them. There are all kinds of taxes, and they all impact out lives and busineses in different ways.

3) Those stupid charts and graphs only use actual data, so please continue to ignore them. Logical.

4) No one is arguing that taxes don't generate revenue. We are arguing that progressive taxes don't generate any more revenue so in the end they are pointless. Please refer to the charts for supporting evidence. Do you know what evidence is? Evidence is data that supports informed opinion. You should look into it.

Why is it every time people post a reality that doesn't fit with your personal universe, you make wildly inaccurate and ignorant statements, and then stomp off as if its the end of discussion? Do you think that any opinion can be made reality simply by wishing hard enough? Do you still wonder why I continue to state that you embarrass yourself by continuing in this manner?

But please continue to not read any facts regarding the topics you discuss, misinterpret anything you manage to accidentally read, and confabulate wild, idiotic generalizations of anyone's point of view that doesn't exactly repeat your sentiments.

Re: The Stimulus Package
 

Strangler, I agree with most of the second half of your last reply to me.

But I'll need to clear up a couple of points, for one.. I call capitalism an experiment only because in history its shown that in all civilizations it can only last so long before socialism, or concepts of socialism start to take over.

What's happening in this day in age in america, is that we allowed certain companies to get so big, that the goverment is actually >>scared<< by the idea of them failing. The most true thing you said is that capitalism is not perfect, and we're just being presented with an example now of why it isn't.

In my last post, when I said what we're doing now isn't working.. I'm not still saying we should raise taxes, I'm just saying that somewhere along the line the system is broken. Maybe once everything crashes down we'll be able to see what the biggest flaw was.

Even though the graphs display raw data on tax rates vs government revenue, I'm still going to say the numbers are misleading. Before you cry about me saying that, remember, I do accept the fact that Tax cuts do not hurt government revenue directly. But somehow it hurts them indirectly, because it has created the need for the government to spend more. If the government is spending more then its increase in revenue, then its broken.

Now, you could say that there is other reasons spending went up, just as much as I could say there's other reasons government revenue went up. But the fact remains that right NOW we're spending money to help patch up some failed buisnesses because we're scared of what will happen if they fail.

One could venture to say that your tax cuts to the upper class actually caused them to gain too much power and influence over the economy.

I'm not saying the data ont he graphs are wrong, but there's a lot more factors that cause that end result to be true. Just like if you were to post a graph of GPD vs government spending, or Tax rates vs ticket prices to NFL games. While their end revenue may not have changed, what HAS changed is that we're getting deeper and deeper into debt. Tax cuts may have nothing to do with it, but I believe it has everythign to do with it. I think Tax cuts have everything to do with the widening of the gap between the upper and lower classes.

I think that how spending has been handled in the government has been irresponceable and is mostly meant to patch up what issues that face us today while ignoring what issues face our children. And I think that has been the case for a LONG time, and I think that a part of what's happening now is we're paying for the mistakes that have been made over the last half century, and we're trying to hand our issues off to the next generation without dealing with it ourselves.

I take any gross income chats with a grain of salt, how about some NET incoming numbers for the last 10 years, taking into consideration the spending too and not just the raw revenue that the governemnt has gained.

Re: The Stimulus Package
 

Because we are romantics and let a dream of a uptiopian society (or nightmares of a controlling shadow government) get in the way of our own happiness and self-actualization.

Also, lets not go completely black and white. I still believe that some socialist constructs are useful, such as medicare and medicaid, unemployment benefits (not welfare) and public schools. Where my support ends is where we try to impose these constructs on the entirety of society instead of reserving them for those who truly need it.

And we are presenting an argument of how is does work when you take the time to look at it in the long view and outside of recent events, and how socialism has failed to the point of catastrophe every time it's been attempted. Each time it is attempted, people ignore the past and simply state "last time we didn't try hard enough/spend enough money on it".

Looking just at the 20th century you will see how economic crisis have been comparative blips on the radar and they never stopped the exponential growth of wealth across America. Our current standard of living in this recession is far better than it was for most of the 20th century, possibly excluding the mid-late 90's and mid-late 80's. And as a non-sequitur for Jason1's benfit, both of those time periods were marked by low tax rates.

Are you equating our tax system with the economic meltdown? If so, please explain.

Standing alone, I'll agree that the tax system is broken, but we're not currently fixing any of it, but instead we're smashing it harder to make sure that it's REALLY broke up good.

What evidence do you base this on. It makes no sense to me. Taxes and spending are mutually exclusive concepts. We have not been good at reducing spending at any point in our history, regardless of tax rates.

Once again, please show evidence that decreased taxes equals increased spending. We've provided evidence of our argument, please provide it for yours. To use out current situation, we're in the middle of spending more money now than in the entirety of out nations history, and I see the taxes going UP for the wealthy, not down.

I'll agree the government is scared of what will happen if companies fail, but I believe the concept of "too big to fail" is incorrect and damaging. These companies assets are tied to collateral so they have inherent value. When one company goes down, they are consumed by the stronger one, and we saw that starting to happen when this crisis first began. Do you see it happening now? No, because everyone is waiting for what the government will dictate to them.

Meanwhile we've bailed out AIG four times now... and I believe that if a company is big enough to not fail, its big enough to be divested into smaller parts. In the end I think you are confusing taxes for a means of social justice and/or means to regulate companies, and I think that is a damaging concept.

Keep in mind the very wealthy also got their wealth decimated by this crisis, and you could say on a relative basis that they were hit HARDER than the average person because this was a financial meltdown that has trickled down to mainstreet. One German businessman killed himself over it. Bear Stearns went down with the ship and many people were ruined within the company. Stock options all but disappeared.

Lets also not forget the government's role in all of this, pushing lenders to give bad loans through incentives and preferential treatment. I still urge everyone to google the Community Reinvestment Act and it's expansion.

1) Once again, please provide any supporting evidence that decreased taxes cause increased spending. I fail to see how they relate. We spend regardless of taxes.

2) Yes, the gap has widened between the upper and lower classes, but what they don't tell you is that while the upper class has grown 70% adjusted for inflation over the last 30 or so years, the lower classes have grown 30% adjusted for inflation. They're both growing, its just that the wealthy are growing faster, and I see no problem with that. Most of the top 5% are our risk takers, investors and small business owners and they be rewarded if they make good economic decisions.

Yes, there are unethical exceptions to the rule, but they remain exceptions when you consider that the top 2% of our earners equals 2.5 million people.

I agree with most of what you say about irresponsible spending, but please explain the half a century of of mistakes. Exactly what are you referring to? I can point out blips on the radar, but as a whole the 20th century, especially the latter part of it, was an amazing time for America and it's economy.

Thats called the deficit, and we're at apporximately 1.7 trillion or so, and expected to grow considerably.

Re: The Stimulus Package
 

Nice way to ignore:

I have 7 minutes until I take off for work, but this is the #1 point I want to reply to. From 1999 to 2009, have taxes been lowered or raised? From 1999 to 2009 has spending been lowered or raised? I don't need to find a graph to show this point. Because you KNOW what the facts are. :)

Lets make it high school level so that everyone can understand the flaw in what you're saying and the flaw in that graph. Lets say Mcdonalds drops the price of their big mac, and the graphs show that their GROSS income is the same, and the amount of customers have risen. That's pretty much what Bond's chart illustrates.

GDP (On his chart would equal the cusotmers on the mcdonalds chart) went up, while taxes (which would be the price of the big mac on the Mcdonalds chart) went down. And GROSS revenue stayed the same. If you posted a chart like this, it makes it seem like its favorable to drop the price of the big mac because you service more customers.

But wait!

Since you have more customer's you have to hire more people, and you need more equipment to service them. So while your gross income stayed the same, and your customer amounts went up, your SPENDING went up also. So that chart suddenly is deemed pointless by the fact that yor NET income went down.

What the goverment is doing now, is like what would happen when Mcdonalds goes bankrupt. Now the spending jumps up a ton, because they're trying to save their asses by taking out loans to get themselves out of their current bad situation.

That's why a chart that shows gross income while ignoring spending is bullshit and misleading. Have a nice day and see you guys in 9 hours. :)

Re: The Stimulus Package
 

I didn't ignore it, I told you it was the DEFICIT. Turn on the news and you'll hear all about it. Its not like its some tightly held secret.

Game, none of anything you have posted has any meaning at all when faced with the fact that regardless of tax rates government revenue remains a constant percentage of GDP. KNOWING this is the ONLY CONSTANT OVER 100 YEARS, shouldn't we manage our SPENDING not our TAXES RATES? Your anecdotal evidence holds no water here. Please find real evidence from an equal sample base. All I ask is quid pro quo.

And I'm sorry, but your McDonalds metaphor makes absolutely no sense. Your assumptions are incorrect, since the added cost of hiring and developing product is absorbed by the private businesses we tax, and not by the government itself. When a company hires an employee, it is because they want to INCREASE REVENUE. If it does not profit, they don't do it or as we have seen they cut the spending (unemployment rising). When was the last time you heard of the government laying people off when their revenues dropped?

To continue your business example, we are in trouble because we borrow more money than we bring in and invest them in areas that have no chance to grow revenue. I'm not saying that the government should spend to make money back, but knowing this is the case we can't make the same decisions that a business would. We have to base spending on revenue, and not attempt to increase revenue by increasing spending. The nature of government spending is to support the public, not profit from them. We tried to profit from investing in bailouts once during the late 80's and took a bath on the investment, selling the investment for pennies on the dollar.

Government revenue is currently plummeting due to a lower tax base and a lack of pressure on wages, and to respond we are hiring more government employees and spending more money than at any point of our history.

HENCE WHEN YOU SPEND MORE THAN YOU BRING IN YOU GO BANKRUPT. To use your languagem you shouldn't need a high school example to understand this. All you need is a credit card.

Clinton was able to balance the budget on historically lower taxes, so why are you so convinced that the idea is a myth?

Re: The Stimulus Package
 

Hopefully the following will put this very frustrating argument to rest.

http://www.nber.org/digest/mar08/w13264.html


http://www.econlib.org/library/Enc/M...-105_table_032

Re: The Stimulus Package
 

My point wasn't to illustrate that the government goes through the exact same cycles as a single buisness. My point was to illustrate that a GROSS INCOME CHART by its very nature is meant to be misleading.

Re: The Stimulus Package
 

Quotes and words following them scare me, but saw this...

http://www.treehugger.com/files/2009...brid-buses.php

Stimulus money in action.
Basically
-It saves money with the switch especially with the summer coming up.
-Reduces noise pollution
-And creates/sustains jobs.


http://edition.cnn.com/2009/POLITICS...lus/index.html
* New highway resurfacing project in Maryland is expected to support 60 jobs
* President Obama: Highway spending will create or save 150,000 jobs by end of 2010
* Another 200 construction projects to be launched in next few weeks

http://www.sacbee.com/topstories/story/1659989.html
-The effects of energy efficiency part of the stimulus.

Numbers and stuff is fun, but at least we are getting some practical signs now.