Percolate UP Economics (Not Trickle Down)

Delusional and political preoccupations that cloud the thoughts of bi-polar thinking seems to have a touch of schizoid personality here on these rants.

 

The national debt is not like getting a credit card. The Government is not a household.

And the more debt the more interest is not true at all...

 

But borrowing money is. Pay interest now or pay later. Same like tax pay indirect or directly.

 

If the Govt "borrows" money than who creates the money they borrow?

 

And you do realize a third of the national debt matures every year and the Govt pays interest on the national debt every year. Why is it that they will all of a sudden experience problems now but they didn't experience problems 40 years ago when the debt was much less. How do you determine the appropriate amount of debt that is allowed before the country collapses?

 

the gubment prints, the treausery loans this money to banks corporations at dirt cheap interist rates. And the US accounts for this printed money that the banks hold or lend. the treasury also sells T-bills and bonds. and pays interist on them. and accounts for that too. The government also borrows on private investments like mutual funds and other investment instruments.

Problem is other countries buy up a lot of these government investments, hence creating a debt with higher interest than they give to the banks in the printed money. So when the gubment creates more debt the cost of the interest on the large scale will also increase.

The risk here is the sold bonds and bills can be cashed in at any time and the gubment will be at risk for economic smash if all the investors wanted their money at one time.

More alarming are the individual States that sell off municiple bonds and take out loans with investment corporations. The interest rates here are staggering. Hence, the high risk of investment loss based on State Bankrupcy.

Pull up some data on any mutual fund company and they will have some forms of gevernment investments. Check the annual report and you will see how much these States are in for and at what rate. It is staggering. And mind you there are thousands of mutual funds like this.

 

The USA has never borrowed/leveraged as much debt in it's history Particulary at the State level. And 40 years ago access for investors were not as it is today.

Understand this. Because the growth outlook and politics of the USA are grim, other emerging countries will start to avoid US government investments, and will look towards other countries that have a groth potential.

And if they all, or just one of them pull out, it will set the USA back a lot.

It's like common sense: a bank is not going to loan a dead beat who has no job massive amounts of money. And an investor is not going to invest in a country that is constantly at war and is creating enemies. And if the USA continues to be a dead beat and broke, no country will invest in it.

 

Sure we have if we are talking relative terms. If you are talking absolute terms than of course we are borrowing more today than yesterday.

They are doing that already and yet the USA still produce a quarter of the world's output last year. Even in all this "grim-ness".

Why? What do you mean "pull out". You mean stop accepting USD?

The question is why do we care if China or any other country loans us back the money we gave them? Ask yourself the question, where did the money that China has, come from in the first place. We don't rely on China or anyone to lend us money in order to spend. It is actually the opposite. WE rely on the Government to spend in order for us to invest in Govt debt.

 

Who cares. I already showed you that we are paying barely more interest now than we were 20 years ago with almost 5 times the debt.

This makes zero sense. I already showed you what our interest expenses were. So what exactly are you trying to say here?

No they can't. You can not take a bond that matures in 5 years and tell the Govt to give you back the money in 2 years. You can sell it on the secondary market though which is incredibly liquid.

Source?

Source?

 

If you are making the case for increased tax rates, take a look at this.

The Truth About Tax Rates

 

I just did a lot of work answering this post, and my answer post disappeared.
Oh boy. Here we go again.

Your graph simply shows revenues down when tax rates were up. Sure. That's from loopholes all over the place. But any tax reform plan raising taxes must have an accompanying assault on loopholes. That's part of what we pay our Congressmen for. We need to hold their feet to the fire.

Now that that's settled. Here's a couple of graphs for you et al to see. Scroll down the articles to the graphs. They show when taxes (on the rich) are up, so is job growth & GDP.

http://thinkprogress.org/economy/2011/06/20/249061/chart-taxes-economic-growth/

http://thinkprogress.org/economy/20...er-taxes-on-the-rich-dont-lead-to-job-growth/

 

Had to bracket ak!'s stupid response in with yours to make a point:

Common sense economics doesn't conclude that people believe that the wealthy aren't rich enough to create jobs - that's such an asinine conclusion to draw that it nearly defies description.

Instead, common sense demands that people understand that it doesn't matter how wealthy someone is, they will not take what they consider stupid risks with their wealth. Common sense requires that understanding. It's not a matter of being ridiculously wealthy: neither George Soros or Warren Buffett will invest in a business that has too much risk.

And regardless how the wealthy spend their money, it is not only no business of yours whatsoever, but it is good that they spend their money: that adds to the economic opportunity for the rest of us.

Common sense demands understanding that as well.

 

Like always, Subdermal talks about me while I'm on ignore. What a cowardly act. And like always, his posts are just filled with words, no facts or data to back it up.

Common sense dictates Warren Buffett will invest in a business when the business produces a product that people buy. Business is simple, if someone wants your product, you produce it. The more people who want your product, the more money you will make. Simple business 101.

Demand creates jobs not supply!

 

How the wealthy spend their money, is a business of ours, because a very high % of what they spend, they spend OUTSIDE THE USA, depriving the US economy of wealth that it needs to stay healthy and grow. It's similar to the remittances that immigrants send back to Mexico. Our lo$$, Mexico's gain. So no, it doesn't add to the economic opportunity for the rest of us (unless you're talking about "the rest of us" who live in all those countries where the rich are spending their money.)

This is one of the main reasons why there is no trickle down, and taxes need to be restored to NORMAL levels in the USA (70-94%) to create jobs for unemployed AMERICANS, and let them go to the stores and spend it so that it can PERCOLATE UP into the economy.

 

No, it isn't. No legal activity engaged with private property is any business of yours.

"very high percentage". How high? Where are your figures?

It's time for an economics/currency lesson.

Spending money overseas does not deprive the US of wealth. The worst it can do is delay the use of the money in the US. When a dollar is spent in Mexico, for instance, that money doesn't disappear in Mexico: it gets converted to pesos, used, and must be returned to the US. They don't burn US dollars that are spent in Mexico, do they?

Have you ever stopped to think about how a foreign spent dollar travels? It always finds its way home. Always. Or do you think that it is in the best interest of Mexico to stack 20s in a box, and keep them there?

What is important, however, is that we do not have economic/business conditions in the US that attract business development here. It's too expensive to do business here; it's too difficult to build a business here; and it's additionally uncertain going forward.

Those things are death to business development in the US. We need to seriously re-think our regulatory climate (I posted earlier about Obama's hailstorm of business regulations), and we need to seriously re-think our levels of taxation.

Or don't: then the money gets put into factories in Mexico. Make no mistake: the money spent to build the factory gets returned to the US (in the manner I mentioned earlier), but the wealth generated by the work done in that factory in Mexico mostly stays in Mexico, and doesn't much help us in the US anymore (other than the profits that the US-based entity gains from these activities - if they're reported in the US).

So you can lament a wealthy person's decision to not put their money into wealth-generating activity in the US, but you cannot say that their dollars were wasted, as they always return - 100%.

If they had been invested in the US, they could have provided a force multiplier of return: the percentage strictly based upon how prolific the business they would have created with it was.

But their decision to invest elsewhere is not something you can blame them for, no more so than you cannot blame a farmer for planting seed in fertile soil, and not on rocks.

See what I'm saying?

This is not at all correct, due the reasons I laid out above. The money sent to Mexico is converted to pesos in Mexico - and those pesos may indeed be put to use in Mexico to create additional wealth in Mexico - but the dollars initially sent to Mexico get returned to the US. You need to understand more about how currencies operate in a heterogenic global currency market.

1st level spending returns: 2nd level and beyond does not.

Money spent elsewhere does return to our economy. The question is: is it eventually used for higher-order (read: wealth generating) activities?

Less and less of it is. But you still cannot blame someone for where they spend their money, all you can do is promote incentives to spend it domestically on wealth-production.

There is nothing normal about 70-94% taxation levels, and the results would be the opposite of your intent if it were attempted, based upon the current condition of our tax regulations. The 70-94% that you are clearly in love with were symbolic only; nearly no one paid that level of taxation.

I think you see a high rate in the past, and actually think it means something. By now you should have run across the thread that proves that regardless of past high rates, tax collections as a percentage of GDP have remained about the same.

It doesn't matter at what high level you attempt: the money will not make it to the Treasury. And attempting to force it will just cause people to spend even more overseas, and possibly simply move their wealth-creation there completely.

That should be something you should be completely against.

 

In the future, when you post, please post a post, not a thesis, OK ? I do have some other things to do today besides devote a long time to answer (refute) your incorrect ideas. I'll take them one at a time, numerically.

1. Where do you get the idea that just because something is legal, it is not any of anybody's business ? Well, if that were the case, I guess we could save some money by abolishing all legislative government, couldn't we ?
EARTH TO SUBDERMAL : Everything everybody does can be everybody's business, all depending on whether it's determined if there is some harm involved to individuals or society, and that legislation might be needed to correct it. That's why we have legislatures.

2. How high is the % ? Why do you ask ? Do you doubt that rich people spend a much higher % of their money OUTSIDE THE US than do poor and middle class people ? LOL. Frankly, I'm getting a little tired of posters who come in here and act all sanctimonious, questioning something that they darn well know is true. Don't be silly, OK ?

3. Spending money overseas certainly does deprive the US of wealth. Doesn't matter if it's dollars or pesos or whatever you wan to call it. BTW, almost of all of the money sent out of the US in remittances by immigrants is sent in wires from banks which have branches in the US ans in foreign countries. As for rich people spending their money overseas, they either use plastic (ever hear of it ?) or they have accounts with stores all over the world. When I used to own my own business, I knew a bunch of those folks.
You're not schooling me, boy.

4. As for our regulatory climate, how would you like it to be re-thought ? Want to see more coal miners die because safety requirements have been abolished ? Want to see building construction standards eased so we can have buildings collapsing and killing thousands of people, as happened in the recent earthquake in Turkey ? Want to see dumping in waterways go back to the days of toxic chemicals in streams and ponds so we can have kids filling hospital cancer wards again ? And all of these for what ? So some businrees owners (you too maybe ?) can stuff their greedy pockets with as much cash as possible regardless of the ramifications ? If Obama has created a hailstorm of business regualtions, that's probably because there has been a desert of business regualtions up to now, due to guys who think like you.

4. As for me seeing what you're saying, what I see is just another greed freak who wants to stuff his pockets, with no regard to to the overall effects on the economy, worker safety, public safety, etc.

5. Back to the money situation, money (wealth in whatever form) spent in other countries STAYS THERE. There is no reason to think that if somebody spends $100,000 US dollars in Thailand, that somehow, that wealth is going to return to the USA. No reason whatsoever. It could circulate around inside Thailand for decades, in sales of this or that. Ot it could go to Vietnam, or China, or Indonesia, etc. It could return to the US, but there's nothing to cause that to happen or even induce it. It could go anywhere, and generally stays in the country where it was "dropped". Much of it will go in taxes to the governments of the initial country, too.

6. Nobody's "blaming" anybody for anything. It simply is a matter of what is good and what is bad for the US economy. It is a cost benefit analysis. Putting money into rich people's hands with the idea that it will trickle down is utter nonsense, and nothing but a scam of Ronald Reagan and his administration. Getting it into poorer people's hands (who spend INSIDE THE USA) is far more productive economically, and beneficial to America.

7. For your edification, 70-94% taxation on the top brackets IS NORMAL because that is the taxation that the USA has had for most of the past 95 years. As for the "current conditions of our tax regulations", LOL, you've got to be kidding. Our current tax regualtions are 35% tax on people with Billion $ incomes. Of course our current tax regualtions wolf have to be changed (I would recommend the 35% be changed to 80%) and loopholes eliminated.

8. And yes, I have ran across the thread that attempted to show that regardless of past high rates, tax collections as a percentage of GDP have remained about the same. That was in the "The Truth About Tax Rates" thread in which you posted a graph in post # 84, and I refuted what you said in post # 89. The rich certainly did pay much mor eform theose much higher taxes, and to say that high taxation money today in 2012, would "not make it to the Treasury" is laughable, and ludicrous. Any money taxed will go to the treasury and any loopholes devised to divert it can be obliterated, by the will of the people.

9. The idea that restoration of the normal high taxation of our past will just cause people to spend even more overseas, and possibly simply move their wealth-creation there completely is absurd. There's no reason to see any change in where people will spend there money as a result of taxation. As for where they will invest and create business, the "move away" is disproved by virtue of the fact that the high taxation has been tried already (for most of the past 95 years) and the rich and busienss owners didn't move away. Also, economic incenticves for them to stay can be introduced as well as economic disincentives for moving away, making that to be simply not economical.

 

ROFLMAO @ the hypocrisy that follows then, considering what you just posted was a wall of text!

It is "your" business solely to the extent that you can have an opinion about it. You should be helpless to DO something about it, as you'll be imposing authoritarianism to do so - and that's supposed to contradict the liberal ideology.

But - of course - it doesn't. Liberalism isn't about tolerance or freedom: it's solely about tolerating that which liberals agree, and allowing that which liberals support.

And knocking out everything else, by any means necessary. You can legislate all freedoms away, protectionist - so using the pat phrase "legislate" is really simple cover for your Authoritarianism.

Because you made an unsupported claim. I happen to believe that the wealthy spend as much outside the US as do the poor, considering the sheer volume of products produced outside the US that are bought by the poor.

Substantiate your claim, or admit that it is baseless.

I'm 45, and your response here does even touch what I said. Reclaiming something as true doesn't make it true. Money spent overseas returns to the US, for US use. They do not burn the dollars that they acquire overseas.

Figure out why.

Fallacy: Appeal to Emotion/Red Herring.

FAIL. You spent one paragraph speaking of basic regulations, and didn't touch even those which have been written in the past 10 years. You are ruled by emotional responses, instead of logical. You clearly don't seem to acknowledge the existence of an excess of regulations, and the nature of the raft of additional regulations imposed by the Obama Administration.

You obviously are interested in simply defending Obama's actions, and don't care about the details.

What a stupid insult. I'm reacting to those things which are ruining our ability to conduct competitive business, and I know: I am in business.

If you cannot acknowledge the difficulty punitive regulations cause in conducting competitive business, you are best put on ignore, and added to the trash heap of irrelevant opinions.

 

There is little else to explain on this topic, other than to reiterate, and clarify - and you have to be willing to admit that you've been incorrect in order for that to have value. Thailand takes the US dollars...and does what with them? You think that they spend the US dollars in Thailand?

Do you spend baht in the US? Figure it out, protectionist - you are truly completely ignorant of how currency value gets returned to the US, and you are obviously myopically unaware of 1st level wealth production, and subsequent levels.

Money spent overseas is an interest-free loan that also creates velocity, as well as gains an instant transactional benefit (read: goods/services are exchanged). That money, however, has to be spent back in the US eventually.

If you spent $10kUS in Thailand, Thailand now owns $10kUS. They can convert that $10k into another currency - let's say yuan - and then China owns $10kUS. Eventually, however, that $10k gets respent in its native country.

It is returned. It just didn't get used creating wealth here, per se.

And that's the fault of the dolts who support punitive anti-business environment policy (like you, obviously). You do not understand the global currency market.

You can trust me: I would not have spent one moment of time on your ridiculous posts if you weren't blaming anyone for anything. It's crystal clear that you're blaming American business - and the wealthy.

Return to past complete tax policy - adjusted for inflation - and you'll get no disagreement from me.

Deal? Or are you now forced to acknowledge the entirely different deduction/tax policy terrain that existed then?

For instance: (Homework assignmen) what level of income did the past 70-94%) impact? How does that compare to present incomes, in inflation adjusted dollars?

Very few people have that type of income. In fact, I can think of none. Can you? Or are you confusing "incomes" with "dividends"?

Pithy - and useless.

How do you stop them from simply avoiding their incomes being counted in the US at all?

OOH! Simple answer! Of course: complete fiction - and the reason we have tremendous outsourcing of wealth-producing activity already.

You can force these people to remain American taxpayers.....how?

Clearly you think you have answers that you do not have.

a) I reject the premise. You have no knowledge whatever of the actual impact of 70-94% top rates, and the deductions in place to avoid them, nor the inflation-adjusted levels of income necessary to even qualify.

b) Calling moving wealth-creation overseas to avoid high taxation and punitive regulation absurd is simply an ignorance of what has already taken place in large measure. More of the same will mean more of the same.

Denying that makes your policies dangerous to Americans.

This response is asinine. Are you telling me that you avoid buying something on the internet because you can avoid taxes on that purchase, and - instead - buy that same item at a brick-and-mortar store, just so you can pay taxes?

Deny that the habits of people wrt taxation don't cause a change in behaviour again. Do it. I'll set up a thread poll, and make your point look completely ridiculous.

It's funny how much reality you have to ignore to continue to keep your addled view of things insulated from criticism. Learn the tax and regulatory environment when 70-94% was imposed. In addition, understand that those levels were for personal income taxes, and not for business.

Your posts do not reflect reality. Learn about International Economics, and the simple monetary theory of the Balance of Payments.

 

It was a wall of text because it had a wall of text of yours to respond to.

Contradicting liberal ideology means nothing to me. I am a staunch Conservative,and have been all my life. You are a young guy, and so you are more influenced by that worst president we ever had, Ronald Reagan. I am older (65), so I'm influenced by that best president we ever had, Dwight D. Eisenhower, a TRUE Conservative. This is why you buy into Reagan's trickle down conjob. Here's the proof that it is a sham, and that the Eisenhower approach of big, strong government fueled by high taxation-91-92% (despite your pipe dream talking points) which produced the highest GDP and job growth we ever had. It also produced a big, strong military, not the small weak one we have now after the Bush years, and 30 years of low taxation. Also when Ike was President he chased the illegal alien invaders back to Mexico with Operation Wetback in 1954. What was Reagan's approach ? He gave them amnesty. That's what you get from small government/low taxes/low spending.
On top of all that the best contrast of the REAL Conservative (Eisenhower), and the fake one (Reagan), is during the World War II years. While Eisenhower was leading the Allied Forces in Europe to victory, as their Supreme Commander, Reagan was in Hollywood making movies about it.
PS- what has our low tax/low spend/small government philosophy gotten us now ? Rhetorical question. I'll tell you. We now have the smallest navy we've had since 1917, and the smallest air force since 1947. How long can we get away with that ? We'll soon be finding out, I suspect.

PS - I owned my own business for 12 years. I know about it quite well. It sounds to me like you're just another typical Republican, business owner, greed freak. You don't have to put me on ignore. You have nothing to tell me. I have no interest to even talk to you anymore. You heard what I've said. If you don't like it, tough !

PPS - your economics talk is utter nonsense. No money spent outside the US has to go anywhere. No remittance$$$$ to Mexico or anywhere else has to go anywhere. You've been listening to a bunch of psuedo-Conservatives who apparently have you programmed to what they want you to believe, and you fall for it, partially because it's what you like to hear.
You think I haven't heard before, all this same jibberish you're giving me here now ? LOL.

Lastly, If you can't afford to run a business, with proper regulations that the American people need to protect them from greed freaks like you, if you can't afford to pay a living wage for 40 hours/week of work without hiring some cheap labor foreigners, then you can't afford to be in business period, and you should go out and do what everybody else who is in that same situation does. Get a job.

 

Another wall of text. Hypocritical poster is hypocritical.

You are not a Conservative. No Conservative believes that taxes need to be increased on anyone. Taxes chill economic activity: that's another thing that Conservatives believe. If you're going to call yourself a Conservative, at least understand what they are.

Since you cannot be honest with yourself, I see no reason to believe why you'd be honest with anyone else. I endeavor to ignore those who refuse to acknowledge being soundly beaten in a debate, so congratulations.

 

HA HA HA. Your answer was 100% predictable. You aren't even aware that before you came along and your hero, Ronald Reagan, we had a REAL definition of Conservative. Before Reagan changed it into the dangerous pile of crap that it is now, we REAL Eisenhower Conservatives believed in BIG, STRONG Government, fueled by high taxation on the rich (91-92% 1951-1963). After WW II, Ike, having seen the disastrous results of countries (ex. Poland) not being adequately prepared for war, resolved to never allow that to happen to America. He taxed the rich and kept us strong. He chased the illegal aliens back to Mexico. He kept the CIA and FBI in good shape, not loaded with Islamist traitors like it is now, (especially in their Arabic translation units) and has been ever since Reagan took over. And you didn't see all this affirmative action crap discriminating against White people, which your boy Reagan had 8 years to do something about, and he did nothing. Likewise with the Bush boys.

You are too young to even know what a REAL Conservative is. So allow me to tell you. A REAL Conservative is someone modeled after ex-President Eisenhower. High taxes on the rich,BIG, STRONG government, creating PROTECTION of the American people and our culture, language, and borders.

It does NOT mean protection of big business or the rich, and their big, fat, bank accounts. You, and the whole dismal Republican Party have picked up the definition of Conservative (a LIE) from that screwball Ronald Reagan, who perhaps has done more harm to America, than any president I can remember. Now we see the highest rate of police officers being killed in the line of duty. And why ? Because of understaffing. And why ? Because of budget cuts. And why ? Because of undertaxation (here in Florida we don't even have a state income tax). And why ? To protect the rich from taxation. And why ? Because of their filthy GREED, and no other reason.
You have absolutely NO CLUE about what a CONSERVATIVE is, and neither do mostly everyone in the Republican Party.

REAL Conservatives, like Eisenhower, and the Republicans of the 1940s and 50s must be rolling in their graves hearing you clumsily trying to descibe what a Conservative is. LESSON DELIVERED . If you learn from it, good. If you don't, not my problem.