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Re: OT: Rating the President
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Re: OT: Rating the President
"need i say more"
It is an interesting website, but yes, please do say more. (: Is being on the board of multiple companies a bad thing? Is it wrong that a wealthy person does have a great deal of influence in American life? |
Re: OT: Rating the President
i really did not have anything more to say http://forum.shrapnelgames.com/images/icons/icon10.gif
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"No one said the rich are evil. The point is the tax cut is unfair. "
I suppose this is an issue of how you view Social Security. My understanding is that Social Security is a "forced" retirement plan on US citizens. The amount you receive from the plan should be somewhat comparable to the amount you contributed to it. It is handled by the government to average out things of people dying soon (and not collecting any) and people living too long (exhausting any amount they would have contributed). Just being an American citizen does not guarantee you that you have social security. You must pay into it over a period of around 20 years I believe in order to have full eligibility. Since it is a retirement plan that is supposed to ensure people avoid poverty, not to ensure they have the same way of life they had while working, I believe that it is reasonable to cap the amount people are paying in (otherwise they would have an inequity where people were paying too much and never had the hope of using all of the money contributed). The wealthy, however, don't plan on living on just want SS would give you at 77k per year, so they normally are going to invest in 401k plans, IRAs, and in other ways contribute to retirement plans in excess of the 77k per year limit. So in that sense, they still are paying social security. On the other hand, if you look at social security as something like free medical insurance like you have in some countries, then I can see how you would view it as just another government expenditure, and in which case you might as well must make it all a part of income tax, and not have a separate line item for it. As for the comments about social security and income tax all being used for the general budget, yes, I am sure they are all in the same bank account, held by Uncle Sam. Yes, I am sure, that during times of deficit spending, if there is a surplus with Social Security, other programs will take money from it to avoid having to issue bonds (which does save the taxpayers money). In theory, if SS starts to demand more money to maintain the benefits it provides, I would imagine that the income tax revenues would be touched to ensure no loss of benefits would occur (and probably a raise of the Social Security tax as well). Yet, for the most part, the money sent in for Social Security gets spent on Social Security benefits (correct me if I am wrong). As such, I don't feel it is fair to view it as the same as income tax, and as such, I don't feel the poor are being treated unfairly if the rich have their income tax rates reduced. |
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OK, so what is a fair tax system?
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Here's my concept, then..or rather my "hey, this would be a good idea" section.
1. No tax brackets. If the tax rate goes up as income goes up, make it do so -gradually-. Leads to 2.. 2. No matter what, you make more money you -bring home- more money. A tax system that doesn't do this is almost the definition of unfair. 3. Simple is good. Unfortunately you get problems here. Simple means people try to weasel their way out of things. Laws are written in very specific anal ways for a reason unfortunately. Phoenix-D |
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[ February 09, 2003, 07:11: Message edited by: Imperator Fyron ] |
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You folks might be alluding to a consumption tax.
Income tax taxes income, obviously, which in a way discourages more work because it puts you in a higher tax bracket making your harder work not worth as much. But you can spend as much as you want under this system (yes, most states have excise taxes too but this is theory). So basically the income tax system encourages more spending and discourages more work. Now why would you want a system that does that? In a consumption tax system, you pay no income tax but you pay taxes on what you spend i.e. all taxes are excise taxes. In this system you are discouraged from spending and encouraged to work because your income is not taxed. People & businesses that consume a lot pay a lot. Most consumption tax proposals do not tax food & medical expenses. Let's see... less spending, more work & more saving... Isn't that a system that would make the economy strong? Slick. [ February 09, 2003, 08:09: Message edited by: Slick ] |
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Only "normal" progressive income taxes discourage getting pay raises. Flat taxes and reasonable progressive income taxes (as in, the richest pay maybe 2x as much as the poorest that do not qualify for tax exemption for being below a poverty line) do not discourage that.
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[ February 09, 2003, 08:12: Message edited by: Imperator Fyron ] |
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Why, because I know what a progressive tax system is and that hording money causes economic problems?
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Askan |
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Askan |
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While storing your money in a hole in the ground may be bad for the economy, saving it in a bank is not. Savings allow the financing of big projects plus the creation of new companies (who usually take several years to become profitable) which creates new jobs. While not an economist, I can't see how anyone would think that saving money is a bad thing. Encouraging people to go into debt to continue to keep spending levels up (which incidentally requires that someone must have saved that money in order for them to borrow it) is the true recipe for disaster.
On another note, while the idea of a federal sales tax in lieu of an income tax sounds like a good idea, it would be devastating to the economies of areas near Canada or Mexico. Currently, goods in Mexico are more expensive than the goods in the US, so you find that many Mexicans drive accross the border to purchase American goods, devastating the local economy on the Mexican side. If the situation were reversed, you would see the American side devastated and everyone going accross the borders to buy their goods. You would also need to deal with the export of goods as well. If we were to charge other countries our sales tax, that would raise the prices of our goods, making them less competitive, hence fewer American goods would be purchased. This second issue, probably has ways around it, though, like no tax on exported goods, however I suspect it wouldn't be that simple. |
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Fian, economics works pretty much opposite of how you just said in your first paragraph.
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I am pretty sure that I am not wrong on this (heck, even the Investor's Business Daily agrees that saving is a good thing). Encouraging spending via debt is only a temporary benefit to an economy. Saving ensures the long term stability of an economy. Where do you think all of this money is coming from that people borrow? It is only possible because some people choose to save their money in banks, which then in turn loan the money to borrowers. If there are no savers, there can also be no borrowers as well. I didn't realize I was talking about rocket science here.
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Spending money causes stores to make money. Their employees make money, and can then spend it to fuel the economy. The stores can buy more product from manufacturers, who can then pay their employees, who can then spend money. If you save your money, none of those people make any money, and less action goes on in the economy.
If you save money in a bank and do not borrow, the banks hardly make any money. If the banks make less money, they have less to lend to other people, who can then not buy anything, and the whole spending cycle dies off. If people Save all their money and not spend it, it is bad; very, very bad. |
Re: OT: Rating the President
Wow, this thread is poppin again! I had some things to say to older Posts, but the moment has passed on most of them. A couple of quick resopnses before my statements:
I'm afraid that there ARE sweat shops in the US. I will grant that they are less common here than in many places. I forgot my other response. One thing I would like to throw on this debate is my take on the fundamental purpose of government. I think that many people don't think enough about what "govern" really implies. Government is a form of oppression. Hear me out: The whole nature of government is that it prevents people from doing what they would do without it and compels people to do what they would not without it. The only real differences in policy involve who does the oppressing and who is on the business end of it. And, of course, the severity of the oppression. Taxes are oppressive. They are also a necessary evil if we are to have government, which everyone who doesn't want to live in Somalia accepts as a necessary evil. Some of these people don't realize that they want to live in Somalia http://forum.shrapnelgames.com/images/icons/tongue.gif So who gets taxed and how much? Obviously that depends on what services people want. Clearly, current tax revenues are insufficient to pay for current services. So, we run a deficit. I'd like to point out that running a deficit is not necessarily bad. See, I have studied economics http://forum.shrapnelgames.com/images/icons/icon6.gif To the point, low taxes and deficit spending are thought of by many economists as beneficial in times of economic downturn like today. Going to war without huge public support and spending gobs of that money on defense and diplomacy are not such good ideas. On the question of which services to provide, people will disagree (duh). But there are a few things that I feel like I should point out. Several of the folks posting here have pointed out that there is no moral obligation for anyone to take care of anyone else and do not lie when they say it. There are, however, practical concerns. Those who have the highest proportion of wealth may control most of our nation's policy-making institutions, governmental and economical, but we middle-class types are the ones who drive the economy. Or at least, we should be. There are more of us, aren't there? It doesn't make good sense to expect someone who makes $40k/yr to pay the same fraction of his income as someone who makes $300k/yr. Unless, of course, we want to remove most of our social services, which some would like to see. This is a viable model, but not for very long. History has shown that nations with extreme disparity of wealth often get in trouble from it. I'm not saying that we would have a revolution, not anytime soon, but those who are concerned with posterity might want to think about it. If I were inclined to lie to you, I could provide some very good statistics from all sorts of reliable sources, backing up my claims. I actually am a statistician, and I know how all of that goes http://forum.shrapnelgames.com/images/icons/icon12.gif But I don't want to trick anyone. I confess that I am a bleeding-heart liberal, and an egg-headed intellectual to boot, so I tend to feel that the poorer end of the scale is getting screwed. I also tend to want to help those people, because I don't like to see people get screwed. But I'm not worried. I'll just do my thing, and that's enough for me. I was going to say more, but this is a long post already, and the rest gets almost mystical, so never mind. Have a nice day, everybody. http://forum.shrapnelgames.com/images/icons/icon7.gif By the way, it seems like the conservatives in this thread tend to outrank the liberals. Does this have some hidden meaning, or is it mere coincidence? Maybe I should do some sort of study... [ February 11, 2003, 06:23: Message edited by: orev_saara ] |
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Oh, I remembered! I agree with Fyron that saving can become problematic if spending gets low, but we should remember that conspicuous consumption is one of our basic cultural values today, so it might balance out.
Or not. http://forum.shrapnelgames.com/image...s/confused.gif |
Re: OT: Rating the President
While I can see how extreme savings can be bad for an economy, an extreme lack of savings is also bad. Currently American society spends more than they make. This is possible due there being money in banks to borrow (probably due to excessive savings in the past, plus foreign investment). If spending exceeds savings for a long period of time, one would expect that eventually the money in banks would run out, abruptly forcing an end to spending. This would be cause an abrupt end to spending, preventing future investment in infrastructure and new businesses, resulting in a major depression in an economy. A lack of savings would also result in a weak civilization unable to fight an extended war (one reason why WW1 and WW2 Lasted so long was because the European nations had a deep reserve of money, plus the Americans were also willing to lend money to European nations as well). On the other hand, a society with a high emphasis on savings would have a constant drag on their economy, never fully achieving their potential when it comes to economic output. I have never heard of civilization collapse due to excessive savings, but I suppose it is in theory possible, maybe driven by a threat of war.
One thing that I dislike about the presentation of economic theories in the classroom (my wife is currently taking an economic course) is that they tend to present truth in the form of black versus white. Spending is good. Saving is bad. I believe it would be better to look at economics as a series of competing forces that must be kept in balance. Encouraging spending is good, yet a certain level of savings is necessary as well. During economic good times, savings should slightly exceed debt spending. During economic bad times, savings should be slightly lower than debt spending. Can anyone disagree with this? |
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Heehee... hey, wait! I'm an egomaniacal totalitarian whatever, and I... oh, yeah.
To Fian: The amount of money in the country is far from fixed. In fact, the vast majority of money doesn't even really exist. It's just ones and zeroes in computers. The actual amount of money increases all the time, so it isn't actually necessary for banks to have all of that borrowed money in reserve somewhere. Money has become almost completely abstracted. Sigh... if only financial math weren't so Damned boring I could be rolling in dough right now with the rest of the actuaries... |
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Fian:
No. Banks make more money by SPENDING it! They buy interest by loaning money out to people. They then loan out the money they make on interest, to make even more money. If people didn't spend more money than they make, and therefore have to borrow it from banks, and just saved all that they made in bank accounts, the banks could not make as much money, and so would loan out less at higher rates, and those that would have borrowed could not afford to borrow any money. As long as people are spending money, banks won't run out of it. [ February 11, 2003, 20:21: Message edited by: Imperator Fyron ] |
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"No. Banks make more money by SPENDING it! They buy interest by loaning money out to people. They then loan out the money they make on interest, to make even more money. If people didn't spend more money than they make, and therefore have to borrow it from banks, and just saved all that they made in bank accounts, the banks could not make as much money, and so would loan out less at higher rates, and those that would have borrowed could not afford to borrow any money. As long as people are spending money, banks won't run out of it."
Wow, I didn't realize what I was talking about was viewed as so controversial. Question one: How do banks get money that they can loan in the first place? Someone chose to deposit it in the bank. What if no one ever deposited money into a bank, how much money would the bank have to loan to the spenders? 0. If a bank has 1 million dollars, and 100 people want to borrow that million dollars, who will the bank lend the money to? The person willing to pay the highest interest rate for it (or if the rates are regulated, maybe they will hide the extra money in "fees" that they charge). If 10 banks have 1 million dollars, and only one person is interested in borrowing it, what interest rate will the person pay? The lowest rate offered by a bank. Based on the above comments, banks need people to save in order for them to exist. If there is too little money saved, interest rates will be pushed higher due to competition (supply versus demand). If there is too much money, interest rates will be pushed lower (supply versus demand). Greenspan setting interest rates confuses the matter, but I am sure that feedback from banks in regards to their supply does affect the decisions that he makes as well. If people should be encouraged to borrow more so that they will spend more, why does Greenspan ever raise interest rates? The reason is that the rate of spending needs to be balanced, not overdone. "Banks make more money by SPENDING it!" If you consider a person depositing money into a bank which is then loaned out to another person as "spending." Then I would agree that "spending" is good. I recommend more people "spend" their money by depositing it in a bank. "If people didn't spend more money than they make, and therefore have to borrow it from banks, and just saved all that they made in bank accounts, the banks could not make as much money" I agree that if everyone saved and no one borrowed, then there would be an economic problem. They key here is balance. Saving versus spending must be kept in balance. "As long as people are spending money, banks won't run out of it." I am not sure about this, but I don't believe that the interest that banks earn on their money is lent back out in the market. Most of the interest made is paid out to those who deposited their money in the banks, staff/equipment who run the bank, and shareholders who own the bank. The rest of the profit could in theory be deposited back into the bank, but I have doubts about that keeping pace with inflation/growth of the economy. If inflation or the economy grows faster than people save, you will eventually run into a point where the banks don't have enough reserves to satisfy all of the loan requests resulting in higher inflation. |
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"If 10 banks have 1 million dollars, and only one person is interested in borrowing it, what interest rate will the person pay? The lowest rate offered by a bank."
If 10 banks have 1 million dollars, and -no one- interested in borrowing (because everyone is saving as much as they can), what happens? The bank goes out of buisness. This is what Fyron is talking about. Phoenix-D |
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Fian:
It is not controversial, you are just confused as to how banks operate. http://forum.shrapnelgames.com/images/icons/icon7.gif Of course if no one deposists any money in the bank they won't have any to loan out. But, there are always people depositing money in the bank. And even if no one deposited for a while, banks own stocks in the stock market, and make money off of that. They already have money in their vaults (~80% figuratively, depending on the current Federal Reserve Rate), and loan it out to make profit off of. It would take a bizarrely unusual amount of circumstances to deplete the banks of all money with how the banking system operates in this day and age. People depositing money in the bank are not spending it. The bank goes and "spends" that money to make more money. There is a colossal difference. Quote:
The interest made on a savings account is designed to be significantly less than the rate of inflation, and so the banks minimize their losses on savings accounts. |
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1) people spending more money than they make results in/is deficit/debt spending. I don't know why our current society believes that this is a good idea, but it sure is addicted to it. Look, if someone needs a car, they should buy within their price range or save up until they can afford it. Constant interest payments aren't good for people! 2) that said, there are times when large investments should be made (ie starting a business). but this doesn't necessitate the existance of banks, it actually requires somebody with liquid assets, eg. a business partner. When loaning money, the bank is just a business partner who gets paid interest for not showing up to work! 3) with the paultry interest rates and the amount of service charges, the only thing the bank has over my trusty mattress is a few armed guards and a vault door! People should save some money, but they should also invest some money. They should not give any of it to the banks, because their money ends up with shareholders - instead they should invest so that they are the shareholder! But hopefully they can be the shareholder of an organization more productive/valuable than just a money-grubbing bank http://forum.shrapnelgames.com/images/icons/icon7.gif 4) this assumes that banks are a required institution... they're just a handy institution, not a requirement for a healthy thriving economy. 5) and so people would have to band together to start up capital projects, businesses, etc. etc. Hmmm people working together, people dominated by a bank, people working together, people dominated by a bank.... I just think there are some weak/sick points in how our modern economies run, is all. [ February 14, 2003, 01:00: Message edited by: jimbob ] |
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This is what banks are for. Banks are a necessity. [ February 14, 2003, 01:05: Message edited by: Imperator Fyron ] |
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Banks in our current society are a necessity, but what ever happened to the extended family, people working together, etc. Before banks existed in their current form, people survived (as did the economies) quite well! The idea of a banking institution loaning out money to joe nobody for just about anything (lines of credit, loans for vacations,etc) is a recent affair. And I'm pretty sure that you could write a cheque (note the spelling, Canadian http://forum.shrapnelgames.com/images/icons/icon10.gif ) to buy a car, it would just have to be a used car in the 400-500$ range is all.
N.A. was settled on the basis of hard working/entreprenurial people banding together to achieve greater things. There was an era in our contries when farmers did barn raisings, families bought and ran stores together, people lived in extended family housing arrangements, etc. Banks are not needed for any of these functions, because human relationship can fulfill any of these. I will concede that very very few of us can buy a house outright, and that a mortgage is a likely requirement. However at least in this case the borrower will end up with a decent asset at the end... but wouldn't it be better if we could avoid paying double or more of the houses value by having a society of lender/borrowers instead of a society of banks/borrowers. |
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Of course it's all complicated these days by the estate agents' markup, the legal fees involved in buying and registering a home, the labour of the various professionals required to design and build the house to the necesaary legal standards... EDIT: Am I imagining this, or did I see a thing about a place in Australia somewhere wher, in the absence of building materials (they're in a desert) they dug themselves an entire town out of the rock beneath their feet, and still live there very comfortably now. Need a new bedroom? Get the pick axe Norma... [ February 14, 2003, 16:48: Message edited by: dogscoff ] |
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I'd say that the early american (primarily US) economy did quite well, circa Adams (what would that be, 1850s?) right up until WWI. During this period, your average Joe Bagodonoughts wouldn't just trundle on down to the local banker and procure a loan for a "frivolous" expense such as a brand new - top of the line - horse/automobile, let alone a line of credit so that he/she could go off on a holiday. The primary purpose of a bank was to help people who wanted to undertake "serious" investment get the starting capital (and then of course the bank gets its pound of the pie). (that said, there was the stock market crash which had bank involvement, but that was more a sickness of the stock markets than the banks)
Today the average Joe is encouraged by nearly every banking (and/or credit card) institution on the planet to enroll themselves in even more debt for the sake of lifestyle. I just can't agree that this is a healthy modus operandi by which to run an economy! Now I didn't choose the pre-WWI time period at random - interestingly the time period in which Western Civilization controlled the largest % of world capital/wealth is now past, and as the Western Civs produce less but consume more, their wealth as a percentage of total world wealth is declining. (I've got the numbers if ya want them) And so my summary equations regarding a vibrant and growing economy: Savings = good Stagnant Savings = bad Consumption = good Reinvestment = better Rabid consumption = extremely imbalanced = bad banks = unnecessary (except for large capital projects) Now I'm just a biologist, but them's my views! [ February 14, 2003, 23:46: Message edited by: jimbob ] |
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Askan |
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