Print Page | Close Window

Why the US declines? Solutions?

Printed From: WorldHistoria Forum
Category: SCHOLARLY PURSUITS
Forum Name: Theories of Society & Economics
Forum Description: Discussion of old or new economic and social theories with reference to the modern world
URL: http://www.worldhistoria.com/forum_posts.asp?TID=126336
Printed Date: 07 Dec 2019 at 09:29
Software Version: Web Wiz Forums 12.01 - http://www.webwizforums.com


Topic: Why the US declines? Solutions?
Posted By: pinguin
Subject: Why the US declines? Solutions?
Date Posted: 23 Feb 2011 at 23:14
Fact, the huge deficit is pushing the U.S. down. Economics, particularly family economics, in that country don't look particularly good at all and the general mood is pesimistic. The question is why things turned this way. Let's analyse the causes.

These are the factors I think are causing the decline, and how the U.S. could fix it, if they wish.

(1) Military expending. The U.S. has keep expending money beyond its possibilities. This is the U.S. budget and how the deficit is growing.



 
If that tendency keeps going on for a decade or more, the impact on the U.S. economy will be devasting.

How to fix it? There are several measures the U.S. could take, but will require a lot of courage.

(a) Reduce the military bases abroad or bring mercenary services. The U.S. gives for free, protection to many allies. However, nobody pays the rent Confused. If those countries need protection (Japan, Corea, European countries) they should pay for it. Otherwise, the U.S. should leave them alone.



(b) Stop worthless wars! Leave the mess of Iraq, Iran and Pakistan for them to solve.

(c) Reduce the military expending controlling the waste! It is well known most of the U.S. gear is overpayed. Military industry is not efficient in economic terms at all. Military industry ineficiency is just leading the U.S. to bankrupcy.

Sample: Each F-35 will cost US$ 63 millions! Confused


(2) Oil . The U.S. foreign policy is largely driven by the necesity to acquire natural resources abroad, mainly oil. But why the U.S. needs oil in the first place?
Importing oil not only force the U.S. to waste money in imports but also forces it to keep militaries abroad at huge expenses.
Get rid of oil and those problems will get away.





How to get rid of oil? There are many ways that country could follow with that in mind:
(a) Follow Brazilian example, and replace large part of the consumption by ethanol.
(b) Go electric. Electric cars already exist. A zero emision policy in main cities would encourage the development of the insfrastructure to support them.
(c) Go hydrogen. This technology also exists, and could complement the others. A zero emisions policy would trigger it spreading.
(d) Develop massive proyect of solar and other clean energy projects.
(e) Increase nuclear energy.

All of this is a lot of work, but it pays off in the long term, and will mean energy independence.

(3) Recover Manufacturing.

Mass manufacturing was lost to the U.S. because it followed some idiotic theories of economists. They talked about the "age of services", that Reagan said very clearly it was nothing else than cutting the hair each other... LOL
Manufacturing plants moved to China, India and elsewhere.
The question is why? The answer: cheap labour.
But nobody try to question again.
How to compite with cheap labour? The aswer: with technology!!
That's was the way the British Empire compited with China and India, in textile industry, during Victorian days and it is not reason it could work again.

What the U.S. could do is focusing in radical technological changes in manufacturing industry that replace labour for machinery. Flexible manufacturing, robotics, high tech would help. But to develop it, it is necesary to invest.

(4) Civil Projects. Go big.

The U.S. is getting behind in big projects. For instance, today the biggest dams are in China and South America, the fastest and more innovative railways are in Japan and Europe, the biggest tunnels and bridges are in Asia and China. The largest buildings in the Middle East and Asia. And even the Panama Channel new project is done by locals this time. The U.S. doesn't even have a fast train!

Investing in infrastructure is a major factor in the efficiency of countries, and that should be a priority.

Let's comment about what the U.S. should do to get out of its economic blues. No kidding please.










Replies:
Posted By: Zagros
Date Posted: 23 Feb 2011 at 23:30
You have created this topic before.  The conclusion was that the US is not so much declining, it is that other powers are rising.

-------------
"There was glory in pissing, Corabb decided as he watched the stream curve out and make that familiar but unique sound as it hit the ground." So true.


Posted By: pinguin
Date Posted: 23 Feb 2011 at 23:31
The U.S. can do a lot better than it is doing today. Come on, even with all the differences, this is an American country, and I wonder how to fix it.

The U.S. has lost force in innovations, for some reasons. But the potential for come back has been there all the time.


Posted By: Parnell
Date Posted: 24 Feb 2011 at 00:34
It seems to me that the US is creating a huge problem by developing a vast fiscal deficit without any appearance of a long term strategy for economic prudence. Tax cuts + spending increases cannot go on indefinately. Something eventually has to give. America needs to behave like an adult. Its voters are spectacularly uninformed. Most seem to think that a fifth of their budget goes on foreign aid. Amazing.

-------------
http://xkcd.com/15/



Patriotism is your conviction that this country is superior to all other countries because you were born in it. ~George Bernard Shaw


Posted By: hugoestr
Date Posted: 24 Feb 2011 at 01:29
Okay, here is the issue: the U.S. as a country is declining by design. It is not that the millionaires who control the U.S. want to destroy it as much as they don't really care one way or another: their wealth is created via government spending and protected via low taxes, subsidies, and the ever promise that if they fail, the U.S. government, which they control, will pay for it. War spending, a big source of wealth for millionaires, is carefully protected.

In other words, everyone is supporting millionaires in the U.S. And if millionaires fail as they did in 2008, the whole country will pay money to replenish the money that they lost.

Since a lot of money is now made financially, and finance is something a bit more like legalize con artistry, there is no need to create infrastructure in the U.S. since most wealth is created via spreadsheet. That is also why there is no need to have a strong public education system or give access to education to middle class or poor people. Or to have affordable health insurance, or good roads. Their money doesn't depend on Americans.

The potential voters are dividing in two: the tribal conservatives and the discouraged liberals. Liberals in the U.S. get so discouraged that they won't vote, since, in reality, both parties are conservative. The "liberal" politicians are moderate conservatives that may cry a bit about the plight of the average person, but will still go ahead and push conservative policies. No one should be fooled: the health care package passed by the Democrats was created by the conservative Heritage Foundation, and it was the alternative health care plan for the GOP through most of the 90s.

So the liberal voter ends up voting for conservatives in the Democratic party because the other option is worse, or they gravitate towards self-defeating third-parties, or they just don't bother to vote.

The GOP has been successful in exploiting tribalism in the U.S., either racial tribalism, exploiting the older, prejudiced white population, religious tribalism, via the non-issue of abortion, or by the threat that guns will be taken away from people. The main point is to get the people into a frenzy so that they will subscribe to the "conservative" package deal and will support policy after policy that could hurt them directly by having their rage take them to the polls.

The conservative white "middle" class, and white poor are very interesting in this area since they have been fooled the most: as a group, the benefit the most from government programs, yet they are the easiest to be put into a tribal frenzy the easiest, and will defend policy after policy that directly hurts them.

So, millionaires get their democratic blessing. They would still get their way, but it would be a bit harder though.


Posted By: pinguin
Date Posted: 24 Feb 2011 at 01:50
Brilliant.
However, what happened with those nationalistic millionaries that fought to improve the country?
Remember Henry Ford?
In any case, I agree that financial artists are destroying not only the U.S. but the world. People is not making money anymore with manufacturing, agriculture and inventions, but simply by playing at the cassino that is the stock exchange!
If millionaries are guilty, perhaps it is time for using the guillotine once more... Wink




Posted By: hugoestr
Date Posted: 24 Feb 2011 at 01:58
Henry Ford benefited from having a better infrastructure in the U.S. Maybe he also loved the country, but it gave him wealth to have a better educated workforce and a lot of roads.

At this point you can run businesses with a small number of educated people, so the need for most of the population to have a university degrees is gone. So there is no need to fund it.


Posted By: pinguin
Date Posted: 24 Feb 2011 at 02:06
Even more, college educated people is cheaper in India, via outsourcing.


Posted By: Al Jassas
Date Posted: 24 Feb 2011 at 02:12
Because its people continue to live in the delusion that they are the greatest and their politicians keep feeding that delusion. The last elections are just a proof of that.
 
Al-Jassas


Posted By: gcle2003
Date Posted: 24 Feb 2011 at 03:08
Hugo and al Jassas are both close, and indeed their reasons reinforce one another.
However, taking pinguin's four points.
(1) Military expending.
Military expenditure is in fact keeping the US economy afloat in the short to medium term. Some of it is useful in the long term also since it helps give the US a technical edge, but in the short term severely reducing the military budget would completely kill the US economy unless some other more fertile ways of spending the money can be found. 
 
At the moment the military budget for the most part simply serves to keep unemployment figures down, and pay people to do no useful work rather than extend unemployment benefits.
 
(2) Oil  (and other natural resources)
Once upon a time the US was more or less self-sufficient in resources of all kinds. It no longer is, because demand has gone up and to some extent supply has shrunk. It therefore for nearly two centuries could afford a completely protectionist tariff policy, behind which its industries could shelter. That is no longer possible because of the US need today to import raw materials, which requires them to move towards free trade. Worth noting here that the US was forced by the EU to give up its plans under Bush to increase substantially tariffs on imported steel.
 
As Hugo said, this may not worry the millionaire classes unduly, but it is nonetheless an important factor.
 
3) Recover Manufacturing.

Dream on. The only way manufacturing can be brought back to the US is by US workers being willing to operate at more or less the same wage levels as workers in other countries (and US companies to accept the same profit margins). That used not to be true, partly because of the protective tariffs above (and some other protectionist strategies.[1]), but also because foreign producers no longer need US capital to invest in new technology, nor are they less able to develop improved technologies themselves. 
 
[1] For instance the raising of 'safety levels' on cars in the late '60s with the effect of for a while reducing or eliminating the threat of foreign sports cars, until US manufacturers could catch up.
 
4) Civil Projects
The major possibilities lie here. It wouldn't take long to lay out a dozen or so immediate improvements that could be made to the US infrastructure. As long as the people are prepared to pay the taxes necessary to pay for them, which is the kicker.
 
In this sense, major expenditure on education and research count as civil projects.
 
 
 
 
 


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: pinguin
Date Posted: 24 Feb 2011 at 04:18
With respect to the military expending, this is a detail of what each gear cost. It is amazing.

http://www.youtube.com/watch?v=C_5KvGXDFIQ - http://www.youtube.com/watch?v=C_5KvGXDFIQ



Posted By: fantasus
Date Posted: 24 Feb 2011 at 05:18
The era of USA as the one power on earth were the late period of near monopoly for the most advances technologies.  Today every part of the planet can - in principle - get any type of technological level, so the differences will be natural ressources and logistics, and then simply the size, demographics and skills of the working populations.


Posted By: Al Jassas
Date Posted: 24 Feb 2011 at 05:45
Hello to you all
 
I agree with Graham on all his points above except manufacturing. The US still can revive manufacturing albeit not to the levels of the 50s and 60s. The only impediment is the business culture that controls both businesses and politicians.
 
The US still has some of the most successful and profitable non-defense non-high tech manufacturers in the world despite foreign competition. The problem is banks and politicians don't want to support these high risk low profit investments and usually the companies after a successful run will self destruct like GM did.
 
Al-Jassas


Posted By: gcle2003
Date Posted: 24 Feb 2011 at 06:42
Originally posted by Al Jassas Al Jassas wrote:

Hello to you all
 
I agree with Graham on all his points above except manufacturing. The US still can revive manufacturing albeit not to the levels of the 50s and 60s.
It can still do so temporarily, but trends are against it. And resurrecting manufacturing (at least traditional concepts of mass manufacturing) would do nothing for the long term health of the economy.
 
What's needed is for some of that military budget to be going to developing new techniques, including as a starter the provision of made-to-measure products that are dynamically changed to suit the buyer (rather as has happened with information on the internet, to some extent anyway).
The important figure then is not the production worker, but the marketer/salesman who takes orders. They have to be near the customer, and in some ways it doesn't really matter where the actual factory is, since its labour utilisation would be minimal.
 
Quote
 The only impediment is the business culture that controls both businesses and politicians.
 
The US still has some of the most successful and profitable non-defense non-high tech manufacturers in the world despite foreign competition. The problem is banks and politicians don't want to support these high risk low profit investments and usually the companies after a successful run will self destruct like GM did.
 
Agreed but you should probably write 'high risk, low profit, and unglamorous investments'. Decisions like that are not that often taken on rational grounds.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: pinguin
Date Posted: 24 Feb 2011 at 09:06
Indeed, the U.S. companies seems not able to take risks anymore. Particularly, if those investments generate jobs.


Posted By: pinguin
Date Posted: 24 Feb 2011 at 10:15
Another contribution to the discussion: the U.S. inequality.

Separate but unequal: Charts show growing rich-poor gap

By http://news.yahoo.com/bloggers/zachary-roth - Zachary Roth

The Great Recession and the slump that followed have triggered a jobs crisis that's been http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/separate-but-unequal-charts-show-growing-rich-poor-gap/40352105/SIG=11qmmp64i/*http://www.nytimes.com/2009/01/05/opinion/05krugman.html - making headlines since before President Obama was in office, and that will likely be with us for years. But the American economy is also plagued by a less-noted, but just as serious, problem: Simply put, over the last 30 years, the gap between rich and poor has widened into a chasm.

Gradual developments like this don't typically lend themselves to news coverage. But Mother Jones magazine has crunched the data on inequality, and put together a http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/separate-but-unequal-charts-show-growing-rich-poor-gap/40352105/SIG=12iko350s/*http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph - group of stunning new charts . Taken together, they offer a dramatic visual illustration of who's doing well and who's doing badly in modern America.

Here are three samples:

• This chart shows that the poorest 90 percent of Americans make an average of $31,244 a year, while the top 1 percent make over $1.1 million:

wealth distribution chart

• According to this chart, most income groups have barely grown richer since 1979. But the top 1 percent has seen its income nearly quadruple:

Wealth share chart

• And this chart suggests most Americans have little idea of just how unequal income distribution is. And that they'd like things to be divvied up a lot more equitably:

Chart showing US attitudes on wealth inequality

To see the rest of these fascinating charts, http://us.rd.yahoo.com/dailynews/yblog_thelookout/ts_yblog_thelookout/storytext/separate-but-unequal-charts-show-growing-rich-poor-gap/40352105/SIG=12iko350s/*http://motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph - click on over to Mother Jones .




Posted By: SPQR
Date Posted: 24 Feb 2011 at 12:59
a couple ways to nip this problem that I can see right now, fix taxes, and cut the defense spending.

looking at Pinguin's chart I saw how great everything was before the Bush administration, what the heck happened??

-------------
Nationalism is an infantile disease. It is the measles of mankind.

- Albert Einstein


Posted By: gcle2003
Date Posted: 24 Feb 2011 at 21:47
pinguin beat me to it. I was considering posting the mother jones charts myself.

-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: Al Jassas
Date Posted: 25 Feb 2011 at 03:44
To illustrate how the American people are so deluded, here is a precious sample of tea partiers who helped flip Wisconsin to the Republican side last election (with a very considerable majority) and what they think (beginning from 0:55):
 
http://www.youtube.com/watch?v=1KxrINvv2Ow - http://www.youtube.com/watch?v=1KxrINvv2Ow  
 
Al-Jassas


Posted By: Seko-
Date Posted: 25 Feb 2011 at 04:37
Silly responses on that video indeed. To say that corporations don't or shouldn't pay taxes is retarded.




Posted By: Seko-
Date Posted: 25 Feb 2011 at 04:39
more pies in the face:  2010




Posted By: Seko-
Date Posted: 25 Feb 2011 at 04:43

2010 Receipts & Expenditures Estimates









Posted By: Seko-
Date Posted: 25 Feb 2011 at 04:47



Posted By: drgonzaga
Date Posted: 25 Feb 2011 at 06:41

What has changed?

 

Download Data for Year 1959:

  single year | download_multi_year - multi year | download_raw - raw data | | | | |
< = ="usgs_ajax.js">

Would you like to download government spending data from index.php - usgovernmentspending.com , spending data that covers all levels of government, United States federal, state, and local government spending? No problem. We have four ways you can download spending data. And more to come.

Fast Lane

Click to download your government spending data for Fiscal Year 1959

#downloadcsv - CSV file #headline - simple text #tabbed - tab-delimited
text
#simple - simple html #styled - fully styled
html  
 

#usgs303 - back to table  |  #broad_col2 - back to top

OK. Now you are ready to download your data.

http://www.usgovernmentspending.com/down1959_0.html - http://www.usgovernmentspending.com/down1959_0.html
 
You can do that for any and all years you desire and 1959 is the perfect base year since it was the last in which the median and lower income classes represented close to 70% of the "national wealth". Subsequently, the politicians began jiggling with the tax structure...and gave us the first (the Kennedy Tax Cuts) but not the last of the vehicles that essentially permitted the private accumulation of capital at obscene levels under myriads of rationalizations.


-------------
Honi soit qui mal y pense


Posted By: opuslola
Date Posted: 25 Feb 2011 at 07:48
A very informative discussion!  I would suggest that raising taxes, is not a way out of the mess, but a way to extend the mess!
 
It appears that some of you would reduce the DOD, budget, but it is already basically a "Jobs Programme!"  Just what would all of those who now suck on the DOD teat, do?
 
Others would raise taxes upon business, corporations, etc.!  But, do any of you really think (feel) that these entities really pay anything?  That is, taxes are  merely figured into the balance sheet, and pricing schedules, so it is the consumer that ultimately pays them! 
 
Raise business taxes 10% and the price of the service or product, will automatically go up 10%, depending upon the ability of the business itself to be competative in the world's markets! 
 
Raise the taxes too high, and American products and service costs  might well become "over-priced?"  Then starts the lay-offs, plant closings, etc., and the entire structure comes crumbling down!
 
Years ago, Bush proposed making it possible for those who contribute to Social Security, to open their own independant retirement accounts, and have the ability to spread thier contributions into other money making or money loosing investments!  But, this great idea was shot out of the sky by our Socialist/Liberal media and representatives!
 
Bush, also proposed placing limits upon payments gained via Law Suits, etc.!  This idea was also shot from the sky, or should I say the launch pad!  Reducing the cost of doing business was also one of Bush's proposals, I think?  But, all we have seen is a never ending series of new Federal and State regulations designed to hamper business rather than  help it!
 
The way I see it is that if one had drawn up a "gameplan" to destroy the USA, 10 or 20 years ago, then the actions we have seen already taken, would have  made up a good part of the plan!
 
I seriously see no way out, other than world wide economic collapse, and some type of re-newal!
 
Regards,
 
Ron


Posted By: Omar al Hashim
Date Posted: 25 Feb 2011 at 07:59
Wow. These graphs just show how good Clinton was.
 
In addition to raising taxes, and slowly cutting defence spending. America also needs to devalue it's currency. Easier said than done, since it's primarily China that is holding the US dollar high, and Obama has already been very active in trying to get the Chinese to devalue the US dollar (ironically, because other countries pegged themselves to the dollar the US is the only country that doesn't have control over the value of its currency).
I think the US should force China's hand by printing money and using it to repay the debt with China. That would force China either to accept an effective debt write-off, or a devaluation of the US$.
 
Also US should raise taxes on the rich, not the poor.


Posted By: drgonzaga
Date Posted: 25 Feb 2011 at 08:01
Here is the "foundation" of 1950s prosperity:
 

Major Enacted Tax Legislation, 1950-1959

 
  • #IRC1954 - Internal Revenue Code of 1954  
  •   http://cfr.vlex.com/vid/1-0-internal-revenue-code-regulations-19700270 - http://cfr.vlex.com/vid/1-0-internal-revenue-code-regulations-19700270
  • #Excise1954 - Excise Tax Reduction Act of 1954
  • #1951 - Revenue Act of 1951
  • #Revenue1950 - Revenue Act of 1950
  • #Excess1950 - Excess Profits Tax of 1950

http://www.taxpolicycenter.org/legislation/1950.cfm - http://www.taxpolicycenter.org/legislation/1950.cfm
 

-------------
Honi soit qui mal y pense


Posted By: Al Jassas
Date Posted: 25 Feb 2011 at 08:03
Actually very few people ask to raise corporate taxes since they form a very tiny percentage of the government income and in any case most compaies don't pay them anyway. Most people ask for a cancellation of the loopwholes which make GE getting 1 billion in tax refund without paying any taxes while others pay a rate of 34%.
 
What people argue about is income tax. Rich people pay less of their income in taxes than poor people, that is a fact. If the rich are to pay the exact same rate (let alone the 1960s rates) most of the budgetary problems will be solved.
 
Al-Jassas


Posted By: pinguin
Date Posted: 25 Feb 2011 at 09:15
What about cutting military waste... I mean, military expenses? Nobody see the fact the U.S. expend to much playing Rambo?
Just an oppinion.


Posted By: Guests
Date Posted: 25 Feb 2011 at 09:46
That is a ticklish subject pinguin. They say a percentage of the defense budget is about 3% to 5% of it's GDP, as compared to it's social programs being something like, uh... about 15%. As for the budget, here is an interesting graph and a link

http://www.usgovernmentspending.com/ - http://www.usgovernmentspending.com/







 Perhaps, cuts all across the board is needed in curbing our out of control, spend, spend, spend government? HA! Yeah right... So much has already been given away to the government than for them to reasonably return much that has already been given unto them. Defense cuts you say? A mere drop in the bucket to the +3 trillion dollar budget and continuously climbing. Angry

 
The question is, who is going to be the ones to tell them to knock off all this spending? Any one group that steps forward will most certainly be painted quite negatively with a very broad brush. Just look at what happened with the tea party group. Somehow, i feel we are doomed too keep ballooning!



Posted By: pinguin
Date Posted: 25 Feb 2011 at 09:57
Then, I am afraid it is "Game over".


Posted By: Guests
Date Posted: 25 Feb 2011 at 10:27
The game is only over when the player gets up to leave. We aren't there yet. Just a lot of frustrated bickering over finances.


Posted By: Anton
Date Posted: 25 Feb 2011 at 10:48
I do not think the situation is that bad. Even without cuts and dollar devaluation, 12 trln can be repaid in 15 years paying some 800 bln  a year. Rising taxes by 8% will give the required cash, considering that total annual income of Americans is about 10 bln a year.  Moreover, increasing taxation of petrol by $1 a liter will give additiona $600 bln a year. USA can also intensify oil and gas production and get hundreds of billions from this. Finally, if I am not mistaken, there was a situation in 60s - 70s when American debt was 100% of GDP and there was no decline of the United States :)


Posted By: opuslola
Date Posted: 25 Feb 2011 at 11:17
"What people argue about is income tax. Rich people pay less of their income in taxes than poor people, that is a fact. If the rich are to pay the exact same rate (let alone the 1960s rates) most of the budgetary problems will be solved.
 
Al-Jassas"
 
And Al, just what do you tend to denote the income number of the "poor?"  I would certainly like to see your "fact?"
 
To borrow a term "the real fact " is that the so called poor in the USA, pay no income tax at all!  In fact, most of them get a "income tax" credit!  That is they receive (as a refund) all of the small amount of income tax that is with-held over the tax year, plus a "premimum!"  In other words they mostly exist within the "negative Income Tax" area!
 
So, just how you could make the statement you did is beyond me!
 
Perhaps you were merely confused with the tax schedules, etc.?
 
Regards,
 
Ron


Posted By: pinguin
Date Posted: 25 Feb 2011 at 11:49
Originally posted by Panther Panther wrote:

The game is only over when the player gets up to leave. We aren't there yet. Just a lot of frustrated bickering over finances.


Yes, some countries continue to live for centuries on past glories, even when the pocket can't finance the pride anymore.


Posted By: pinguin
Date Posted: 25 Feb 2011 at 11:51
Originally posted by Anton Anton wrote:

I do not think the situation is that bad. Even without cuts and dollar devaluation, 12 trln can be repaid in 15 years paying some 800 bln  a year. Rising taxes by 8% will give the required cash, considering that total annual income of Americans is about 10 bln a year.  Moreover, increasing taxation of petrol by $1 a liter will give additiona $600 bln a year. USA can also intensify oil and gas production and get hundreds of billions from this. Finally, if I am not mistaken, there was a situation in 60s - 70s when American debt was 100% of GDP and there was no decline of the United States :)


Indeed, but that could happen in countries that realize they are in economical trouble, and take measures to fix it. Don't expect the budget is going to decrease authomatically. Americans don't see the problem so there is no way they take measures to fix it.




Posted By: gcle2003
Date Posted: 26 Feb 2011 at 01:33
Originally posted by opuslola opuslola wrote:

"What people argue about is income tax. Rich people pay less of their income in taxes than poor people, that is a fact. If the rich are to pay the exact same rate (let alone the 1960s rates) most of the budgetary problems will be solved.
 
Al-Jassas"
 
And Al, just what do you tend to denote the income number of the "poor?"  I would certainly like to see your "fact?"
What on earth is 'income number' supposed to mean? Al Jassas said nothing about an 'income number'.
Quote
To borrow a term "the real fact " is that the so called poor in the USA, pay no income tax at all!  In fact, most of them get a "income tax" credit!  That is they receive (as a refund) all of the small amount of income tax that is with-held over the tax year, plus a "premimum!"  In other words they mostly exist within the "negative Income Tax" area!
 
So, just how you could make the statement you did is beyond me!
You don't seem to have read what al Jassas wrote. He said:
(a) what people argue about is income tax. That happens to be a true statement, whether the people are correct to do so or not.
(b) The rich pay less of their income in taxes than the poor do. He did not say 'pay less income tax' which you seem for some reason to have assumed, presumably because you had a knee-jerk answer to hand in your propaganda sheet.
 
It is correct that the rich pay less of their income in taxes, because most of the taxes paid by poor people are paid by their employer (through, e.g. payroll tax) or in the form of excises like sales and property taxes and the like, which all acount for a far lower percentage of rich people's income that poor ones.
Quote  
Perhaps you were merely confused with the tax schedules, etc.?
At least he was paying attention.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: gcle2003
Date Posted: 26 Feb 2011 at 01:42
No-one is going to get anywhere as long as transfer payments are seen as 'government expenditure'. It is a reasonable goal to reduce actual expenditure on government by increasing efficiency, but a far different thing to cut output or the transfer of money from one set of people to another.
 
It's worth noting how much of actual government expenditure (which does not include things like social security or what for wome reason are dismissed by some people as 'entitlements') actually goes on subsidies to companies and, in particular, banks.
 
At this point of course there are valid reasons for not wanting to raise taxes, expecially on those hard-hit by the slump, but much of the whole problem derives from the inadequate taxes that the US has been paying for a generation and more, resulting in the deterioration in education, infrastructure, law and order and all the other government activities that have steadily been cut back and that people now complain about.
 
 


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: gcle2003
Date Posted: 26 Feb 2011 at 01:49
Originally posted by Panther Panther wrote:






That's what I mean by confusing government expenditure with transfer payments. If the government takes a dollar from X and gives it to Y than the government hasn't spent that money: it's still around.
 
Of course at a deeper level it needs to be understood that money spent hasn't gone away or disappeared ionto some oblivion. Money spent has merely been ransferred from one person's (or companie's) pocket to another one, ready to finance another transaction somewhere else. Of course it can be saved, which deprives it of any use, but it still sits around, usually steadily losing value.
 
But the idea that money can be exhausted isn't one that's easy to put over even in economics classes. It'll certainly take more than a few Nobel prize winners.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: gcle2003
Date Posted: 26 Feb 2011 at 01:54
Originally posted by Anton Anton wrote:

I do not think the situation is that bad. Even without cuts and dollar devaluation, 12 trln can be repaid in 15 years paying some 800 bln  a year. Rising taxes by 8% will give the required cash, considering that total annual income of Americans is about 10 bln a year.  Moreover, increasing taxation of petrol by $1 a liter will give additiona $600 bln a year. USA can also intensify oil and gas production and get hundreds of billions from this. Finally, if I am not mistaken, there was a situation in 60s - 70s when American debt was 100% of GDP and there was no decline of the United States :)
Without stopping to checkout the figures, which seem reasonable enough, you're in general right. Proper policies could revive the US economy even if it would be difficult to regain former dominance.
 
How likely however are any of those things to come to pass, given the likelihood that the next administration will be like this one, whether waving a Democrat or a Republican flag?
 
As a matter of fact UK debt is currently over 300% of GDP but it's safely long-term and the economy is stronger than the US, though not as strong as north-western continental Europe.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: pinguin
Date Posted: 26 Feb 2011 at 02:25
How do we call this trend in Britain, the U.S. and other western countries? What about this: The "Argentinazing" of the West... Shocked




Posted By: drgonzaga
Date Posted: 26 Feb 2011 at 03:45
I've always been fascinated by the perverse desires among some quack heads about their readiness to proclaim Columbia difuntis est premised simply on the internal political dialogue of the Americans themselves. Why our resident squawker, the flightless wonder, even drags in sheet music from the early 20th century, and extends the doom talk to cover Western Civilization implying the end of the world is near. The fact that all eyes are on Washington should give a strong hint that the yammering about decline is but self-induced wishes bespeaking suicide. For a Chilean to glory in the "falling dollar" only emphasizes this distension as a projection of an old saw: cutting one's nose off to spite one's face. Just recently, the Chilean Senate went on record in criticism of President Pinera and the head of the Chilean Central Bank--Jose de Gregorio--for not properly considering the reality of the dollar in Chile's economy with respect to the nation's agrarian sector for the sake of showy "development" on international markets with respect to the mining industry. They reminded Pinera that he campaigned on the promise of supporting a sound dollar since such was critical to the flow of capital within Chile, something that the mining industry does not provide since the capital it generates is normally recycled outside of Chile itself (you know those nasty multi-natioanls and their profits). Selling copper to China at US$4 a pound does not represent the translation of this sum into the Chilean economy, certainly not to the degree that agricultural production for export to the United States does. Gregorio, of course, responded by claiming that the Chilean eoconomy will supposedly "grow" from about 5 to 7% during 2011 while keeping mum over the upturn in inflation into the third percentile from the negative levels it achieved in January of 2010.
 
Compare the commentary:
http://en.mercopress.com/2010/12/18/chilean-senators-warn-about-social-impact-of-cheap-us-dollar-for-farm-areas - http://en.mercopress.com/2010/12/18/chilean-senators-warn-about-social-impact-of-cheap-us-dollar-for-farm-areas
 
http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=CLN - http://www.tradingeconomics.com/Economics/Inflation-CPI.aspx?symbol=CLN
 
Now on this thread we've read a lot of carping over taxes, budgets, and "weak" dollars imagining a U. S. bankruptcy. The truth here is the debate is an old one and actually focuses on the byzantine nature of US Tax Code that more or less has become an elephant designed by a comittee. Neverthless, given the realities of GDP one might fashion whatever argument one wishes premised upon the ubiquity of the US$ on international markets. To engage in that game one can fool with the data here:
 
http://www.usgovernmentspending.com/us_gdp_history - http://www.usgovernmentspending.com/us_gdp_history
 
My question for the venturesome: What is the difference between "welfare" expenditures and "pensions"?


-------------
Honi soit qui mal y pense


Posted By: gcle2003
Date Posted: 26 Feb 2011 at 04:48
Nothing really, from an economic point of view. They both represent transfer payments from those who pay more taxes to those who pay less. Ignoring moral considerations, in a depressed economy transfer payments act to reduce saving and increase spending, which are required to boost (or maintain) monetary demand, thus putting a brake on deflation. In a booming economy they act to put a brake on the boom, thus lessening the impact of both downturns and upturns.
 
They also from a political point of view act as a negative feedback mechanism, lessening the normal accumulation of wealth in ever fewer hands that is typical of unrestricted capitalism, thereby contributing to peaceful inter-class relations and lessening the danger of revolutions or uprisings like those we are seeing currently in the middle east.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: Al Jassas
Date Posted: 26 Feb 2011 at 05:01
Hello to you all
 
Thanks for Graham for explaining what I was saying. Warren Buffet if I am not mistaken pays around 17% of his income as taxes while the combined federal (forget state) taxes are around 30%. The average income taxes payed by the top 400 taxpayers is around 16%:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3090 - http://www.cbpp.org/cms/index.cfm?fa=view&id=3090
 
This is the problem with the US. Rich people pay less rates than lower income people squeezing the lower income people and damaging the economy. A fairer tax system will cancel all that.
 
Al-Jassas
 
 


Posted By: pikeshot1600
Date Posted: 26 Feb 2011 at 05:32
Originally posted by Al Jassas Al Jassas wrote:

Hello to you all
 
Thanks for Graham for explaining what I was saying. Warren Buffet if I am not mistaken pays around 17% of his income as taxes while the combined federal (forget state) taxes are around 30%. The average income taxes payed by the top 400 taxpayers is around 16%:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3090 - http://www.cbpp.org/cms/index.cfm?fa=view&id=3090
 
This is the problem with the US. Rich people pay less rates than lower income people squeezing the lower income people and damaging the economy. A fairer tax system will cancel all that.
 
Al-Jassas
 
 


Al, as long as the political aristocracy are disproportionately multi-millionaires paying 16%, it ain't gonna happen.






Posted By: pinguin
Date Posted: 26 Feb 2011 at 05:39
Originally posted by drgonzaga drgonzaga wrote:

I've always been fascinated by the perverse desires among some quack heads about their readiness to proclaim Columbia difuntis est premised simply on the internal political dialogue of the Americans themselves. Why our resident squawker, the flightless wonder, even drags in sheet music from the early 20th century, and extends the doom talk to cover Western Civilization implying the end of the world is near. The fact that all eyes are on Washington should give a strong hint that the yammering about decline is but self-induced wishes bespeaking suicide. For a Chilean to glory in the "falling dollar" only emphasizes this distension as a projection of an old saw: cutting one's nose off to spite one's face. Just recently, the Chilen Senate went on record in criticism of President Pinera and the head of the Chilean Central Bank--Jose de Gregorio--for not properly considering the reality of the dollar in Chile's econ....

(And thousands of more BS LOL)



Do you think Spain is following the same Argentinazing tendency? I would bet on it.

For South America, if the U.S. sunk, it will produce some troubles, indeed. But we aren't in the 60s anymore. We will survive very well, giving our trade is not monopolized by that country anymore.

Listen "Cambalache" LOL





Posted By: drgonzaga
Date Posted: 26 Feb 2011 at 06:51

Wake up and smell the coffee, Penguin, and rely on the factual rather than the histrionics of the 1930s as repeated by the likes of their current representatives such as Hugo Chavez and his ilk. The notion that the US "monopolized" the trade of Latin America has nothing to do with anything conspiratorial and is premised simply on economic market realities that have changed little either from a historical perspective or in terms of the present generation. See the historical stats here:

http://www.census.gov/foreign-trade/statistics/historical/index.html - http://www.census.gov/foreign-trade/statistics/historical/index.html
 
As for Chile--
http://www.census.gov/foreign-trade/balance/c3370.html - http://www.census.gov/foreign-trade/balance/c3370.html
 
Argentina:
http://www.census.gov/foreign-trade/balance/c3570.html - http://www.census.gov/foreign-trade/balance/c3570.html
 
Brazil:
http://www.census.gov/foreign-trade/balance/c3510.html - http://www.census.gov/foreign-trade/balance/c3510.html
 
Mexico:
http://www.census.gov/foreign-trade/balance/c2010.html - http://www.census.gov/foreign-trade/balance/c2010.html
 
Canada:
http://www.census.gov/foreign-trade/balance/c2010.html - http://www.census.gov/foreign-trade/balance/c2010.html
 
Now explain the reality of the latter two when juxtaposed to the others...
 
No need to invoke the ghost of Enrique Santos Discepolo that so disturbed your Argentine friends in '76:
 
Cambalache (closing stanza)
 
Siglo veinte, cambalache
problematico y febril!
El que no llora, no mama,
y el que no afana es un gil.
Dale nomas! Dale que va!
Que alla en el horno
nos vamo a encontrar!
No pienses mas,
sentate a un lao.
Que a nadie importa
si naciste honrao.
Que es lo mismo el que labura
noche y dia, como un buey
que el que vive de los otros,
que el que mata o el que cura
o esta fuera de la ley.
 
English translation:
Twentieth century, bazaar
problematic and feverish!
If you don't cry you don't get fed
and if you don't steal you're a stupid.
Go ahead! Keep it up!
That there, in hell
we're gonna reunite.
Don't think anymore,
move out of the way.
Nobody seems to care
if you were born honest.
It's the same the one who works,
day and night like an ox,
than the one who lives from the others,
than the one that kills or heals
or than the one who lives outside the law.
 
The populismo of the 1930s is as disconnected today as it was then since it's only product was the personalismo of the tyrants.


-------------
Honi soit qui mal y pense


Posted By: opuslola
Date Posted: 26 Feb 2011 at 08:31
Originally posted by gcle2003 gcle2003 wrote:

Originally posted by opuslola opuslola wrote:

"What people argue about is income tax. Rich people pay less of their income in taxes than poor people, that is a fact. If the rich are to pay the exact same rate (let alone the 1960s rates) most of the budgetary problems will be solved.
 
Al-Jassas"
 
And Al, just what do you tend to denote the income number of the "poor?"  I would certainly like to see your "fact?"
What on earth is 'income number' supposed to mean? Al Jassas said nothing about an 'income number'.
 
Income number seems to indicate a number in $US, that is subject to taxes!  Very simple!
 
Quote
To borrow a term "the real fact " is that the so called poor in the USA, pay no income tax at all!  In fact, most of them get a "income tax" credit!  That is they receive (as a refund) all of the small amount of income tax that is with-held over the tax year, plus a "premimum!"  In other words they mostly exist within the "negative Income Tax" area!
 
So, just how you could make the statement you did is beyond me!
You don't seem to have read what al Jassas wrote. He said:
(a) what people argue about is income tax. That happens to be a true statement, whether the people are correct to do so or not.
(b) The rich pay less of their income in taxes than the poor do. He did not say 'pay less income tax' which you seem for some reason to have assumed, presumably because you had a knee-jerk answer to hand in your propaganda sheet."
 
The above is merely word-play of the worse kind!  The so called "poor" in America, pay "no income tax!", zed, nada, zip, etc.!  Instead they receive an "Earned Income Tax Credit!"  Perhaps you and your friends have never heard of it? 
 
It is correct that the rich pay less of their income in taxes, because most of the taxes paid by poor people are paid by their employer (through, e.g. payroll tax) or in the form of excises like sales and property taxes and the like, which all acount for a far lower percentage of rich people's income that poor ones.
Quote  
 
But, perhaps you are tending to confuse "total taxes", without excluding "Income Taxes!"
 
Perhaps you were merely confused with the tax schedules, etc.?
 
At least he was paying attention.
I doubt it, as I doubt you!
You mention "payroll taxes" which I assume you tend to mean "social security taxes", etc., as well as taxes in the form of "excise" or "Sales" taxes etc., which is far removed from "income taxes!"
 
You both should well just mention "total taxes" paid, rather than "income!"  That is where your arguements fall upon thier face!
 
If there is an unfair "tax" (if one wants to call Social Security as a tax) then you enter a differing world!
 
Of course the Social Security deductions, hit the lower classes in a much higher degree than the upper ones, since Congress, in its stupidity, has for ever placed an upper limit upon the amount of "earned income" that is to be subjected to the "Social Security", dedution!  Note, I do not call it a "tax", since every one who sees this number of dollars deducted from their pay-check, do expect to get it all back when they retire, or become disabled, etc.!  However when the limit of income subject to such deductions is reached, then no more deductions are made!
 
I call it lunacy, but you might well call it something else?  After a certain point, I feel the "deduction" or "tax" if you want to call it that, should not have any limit!  But, I also believe in a "Means test" before any of these deductutible amounts shoud be returned to the payer!
 
It should well then become merely a form of "Noblis Oblige'!"
 
I shall stop now, since I believe I have made my point!


Posted By: Al Jassas
Date Posted: 26 Feb 2011 at 08:38
Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by Al Jassas Al Jassas wrote:

Hello to you all
 
Thanks for Graham for explaining what I was saying. Warren Buffet if I am not mistaken pays around 17% of his income as taxes while the combined federal (forget state) taxes are around 30%. The average income taxes payed by the top 400 taxpayers is around 16%:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3090 - http://www.cbpp.org/cms/index.cfm?fa=view&id=3090
 
This is the problem with the US. Rich people pay less rates than lower income people squeezing the lower income people and damaging the economy. A fairer tax system will cancel all that.
 
Al-Jassas
 
 


Al, as long as the political aristocracy are disproportionately multi-millionaires paying 16%, it ain't gonna happen.




 
And isn't it the people who gave that aristocracy the power in the first place?
 
Seeing the current political landscape of the US and to a lesser extent other countries I couldn't but help noticing the similarities between today's corporate political class and the Liberals (particularly the utilitarians) who dominated european economic policies in the 1820s untill the middle of the 19th century. Should we expect a second coming for socialism/communism?
 
Al-Jassas
 


Posted By: opuslola
Date Posted: 26 Feb 2011 at 08:46
Al Jassas, I would respectfully ask that you read my post, which exists just above yours?  It seems your post reached the site before my long winded one!


Posted By: pinguin
Date Posted: 26 Feb 2011 at 08:52
Originally posted by drgonzaga drgonzaga wrote:

 
No need to invoke the ghost of Enrique Santos Discepolo that so disturbed your Argentine friends in '76:
 
...
 
The populismo of the 1930s is as disconnected today as it was then since it's only product was the personalismo of the tyrants.


Actually, I think Cambalache appies perfectly to the current situation of the U.S., Italy, Greece, Spain and some other countries of Europe, where corruption soars (Enron anyone?)...Wink

Cambalache (Flee bazaar)
 
English translation:
Twentieth century, bazaar
problematic and feverish!
If you don't cry you don't get fed
and if you don't steal you're a stupid.

Go ahead! Keep it up!
That there, in hell
we're gonna reunite.
Don't think anymore,
move out of the way.
Nobody seems to care
if you were born honest.
It's the same the one who works,
day and night like an ox,
than the one who lives from the others,
than the one that kills or heals
or than the one who lives outside the law.



Posted By: Anton
Date Posted: 26 Feb 2011 at 09:47
Originally posted by pinguin pinguin wrote:



For South America, if the U.S. sunk, it will produce some troubles, indeed. But we aren't in the 60s anymore. We will survive very well, giving our trade is not monopolized by that country anymore.



"Sink" is too strong word. Anyway, there is a Russian saying "While fat pines, skinny dies" Wink


Posted By: opuslola
Date Posted: 26 Feb 2011 at 09:51
I expect a response from Al Jassas, at any time!  But, perhaps the answers do not readily come to  mind?
 
Regards,


Posted By: pinguin
Date Posted: 26 Feb 2011 at 10:12
Originally posted by Anton Anton wrote:


"Sink" is too strong word. Anyway, there is a Russian saying "While fat pines, skinny dies" Wink


Indeed. There is also a Spanish saying that says: "Quien a buen arbol se arrima buena sombra la cobija" (who snuggles up to good tree good shade shelters him)... That's an advice for skinny countries, who are already switching to better trees LOL


Posted By: pikeshot1600
Date Posted: 26 Feb 2011 at 13:01
Originally posted by Al Jassas Al Jassas wrote:

Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by Al Jassas Al Jassas wrote:

Hello to you all
 
Thanks for Graham for explaining what I was saying. Warren Buffet if I am not mistaken pays around 17% of his income as taxes while the combined federal (forget state) taxes are around 30%. The average income taxes payed by the top 400 taxpayers is around 16%:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3090 - http://www.cbpp.org/cms/index.cfm?fa=view&id=3090
 
This is the problem with the US. Rich people pay less rates than lower income people squeezing the lower income people and damaging the economy. A fairer tax system will cancel all that.
 
Al-Jassas
 
 


Al, as long as the political aristocracy are disproportionately multi-millionaires paying 16%, it ain't gonna happen.




 
And isn't it the people who gave that aristocracy the power in the first place?
 
Seeing the current political landscape of the US and to a lesser extent other countries I couldn't but help noticing the similarities between today's corporate political class and the Liberals (particularly the utilitarians) who dominated european economic policies in the 1820s untill the middle of the 19th century. Should we expect a second coming for socialism/communism?
 
Al-Jassas
 


Since political interests have come to understand the power of media (since the 1960s), money has come to dominate politics as never before that time.  Media exposure is very expensive.  The "political aristocracy" is not the same as in 1800 when the "rich; the well-born and the able" were considered the rightful arbiters of politics and power.  Now it is just who has the money.

Corporate or other established financial interests now manipulate, and in essence control, elected representatives through their influence over those representatives' financial requirements...."you want media exposure, we'll help pay for it - for a price."

Socialism seems to have discredited itself through unsustainable entitlements; communism seems to have discredited itself through the inability to do anything except to spread poverty around equally. 

Is there a "solution" to the relative decline of the US?  Probably not.  Adapting to the reality that the disproportionate allocation of prosperity that existed, 1950 - 1980/90 is over is probably the best that can be expected.  Realistically, the prosperity that was thought to exist, or that could be expected, was an historical anomaly that could never be sustained.  The return to a more usual reality of basic subsistence and to more modest expectations seems to be in order.  What that may mean for the outraged dis-entitled citizen, or the dis-enfranchised union member has yet to be determined.

The observed effects of "globalization" seem to be the leveling out of labor costs, the diminishment of working class influence, and the concentration of wealth in fewer hands.  That tends to make it easier for the wealthiest to control the "political aristocracy" by purchasing influence and access to media.  Media can be manipulated to demonize and destroy whoever the adversary of the day might be - unions; political opponents; unpopular social groups, etc.

The United States will survive as a great power, even if only in the Western Hemisphere, and the United States will continue to to be a prosperous alternative to other places to live, but not in the relative sense of 1950 to 1990.  Too many things have changed, and they are basically reverting to the longer term historical reality that existed before that period of anomaly.

          


Posted By: gcle2003
Date Posted: 27 Feb 2011 at 00:11
Originally posted by opuslola opuslola wrote:

Originally posted by gcle2003 gcle2003 wrote:

Originally posted by opuslola opuslola wrote:

"What people argue about is income tax. Rich people pay less of their income in taxes than poor people, that is a fact. If the rich are to pay the exact same rate (let alone the 1960s rates) most of the budgetary problems will be solved.
 
Al-Jassas"
 
And Al, just what do you tend to denote the income number of the "poor?"  I would certainly like to see your "fact?"
What on earth is 'income number' supposed to mean? Al Jassas said nothing about an 'income number'.
 
Income number seems to indicate a number in $US, that is subject to taxes!  Very simple!
Not simple at all. Totally obscure in fact, to the extent of meaninglessness. Give an example and tell us how an 'income number' is calculated?
Quote
Quote
 
Quote
To borrow a term "the real fact " is that the so called poor in the USA, pay no income tax at all!  In fact, most of them get a "income tax" credit!  That is they receive (as a refund) all of the small amount of income tax that is with-held over the tax year, plus a "premimum!"  In other words they mostly exist within the "negative Income Tax" area!
 
So, just how you could make the statement you did is beyond me!
You don't seem to have read what al Jassas wrote. He said:
(a) what people argue about is income tax. That happens to be a true statement, whether the people are correct to do so or not.
(b) The rich pay less of their income in taxes than the poor do. He did not say 'pay less income tax' which you seem for some reason to have assumed, presumably because you had a knee-jerk answer to hand in your propaganda sheet."
 
The above is merely word-play of the worse kind!  The so called "poor" in America, pay "no income tax!", zed, nada, zip, etc.!  Instead they receive an "Earned Income Tax Credit!"  Perhaps you and your friends have never heard of it? 
Of course I've heard of it. And as I tried uselessly as usual to explain to you, 'income tax' isn't the point. Taces that are paid out of income is the point. Your view is just as idiotic as claiming that health care is free in he US because if you can't afford to pay for it don't have to.
 
And I've filled in US income tax returns for my mother-in-law, though happily I never had to for myself, so I know a fair amount about it.
 
It's you that is playing around with words trying to make a ridiulous claim that the poor don't pay taxes.
Quote  
Quote
It is correct that the rich pay less of their income in taxes, because most of the taxes paid by poor people are paid by their employer (through, e.g. payroll tax) or in the form of excises like sales and property taxes and the like, which all acount for a far lower percentage of rich people's income that poor ones.
Quote  
 
But, perhaps you are tending to confuse "total taxes", without excluding "Income Taxes!"
 
Perhaps you were merely confused with the tax schedules, etc.?
 
At least he was paying attention.
I doubt it, as I doubt you!
You mention "payroll taxes" which I assume you tend to mean "social security taxes", etc., as well as taxes in the form of "excise" or "Sales" taxes etc., which is far removed from "income taxes!"
This may surprise you, because I suppose you may live by spending accumulated capital left you by your parents or some other benefactor, but poor people - even moderately well off people - pay all their taxes out of income.
 
Shocking isn't it? Why don't they just sell their palatial villa in Acapulco and pay their taxes ofût of that instead? 
 
By 'payroll taxes' I mean taxes nominally paid by the employer (or withheld by him) on the basis of payroll. In the US you have, federally, social security taxes, unemployment taxes, Medicare, and withheld income tax. There are state versions too but I can't keep up with all of them.
 
Quote
You both should well just mention "total taxes" paid, rather than "income!"  That is where your arguements fall upon thier face!
 
If there is an unfair "tax" (if one wants to call Social Security as a tax) then you enter a differing world!
Of course it's a tax. The rest is smokescreen.
 
Quote
Of course the Social Security deductions, hit the lower classes in a much higher degree than the upper ones, since Congress, in its stupidity, has for ever placed an upper limit upon the amount of "earned income" that is to be subjected to the "Social Security", dedution!  Note, I do not call it a "tax", since every one who sees this number of dollars deducted from their pay-check, do expect to get it all back when they retire, or become disabled, etc.!  However when the limit of income subject to such deductions is reached, then no more deductions are made!
Those especting to 'get it all back' are living in a fool's world. Not really a paradise, because actually they normally get a lot more back than they pay in in terms of value. Much more than a private investment could ever return, except by an enormous fluke. That's true even in America, unless current rghtward swings lead to Social Sêcurity being privatised, which will desroty the whole system.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: pinguin
Date Posted: 27 Feb 2011 at 00:31
Originally posted by pikeshot1600 pikeshot1600 wrote:


Is there a "solution" to the relative decline of the US?  Probably not.  Adapting to the reality that the disproportionate allocation of prosperity that existed, 1950 - 1980/90 is over is probably the best that can be expected.  Realistically, the prosperity that was thought to exist, or that could be expected, was an historical anomaly that could never be sustained.  The return to a more usual reality of basic subsistence and to more modest expectations seems to be in order.  What that may mean for the outraged dis-entitled citizen, or the dis-enfranchised union member has yet to be determined.


Indeed. Once upon a time, the U.S. was decades ahead in development than anyone else, but the world catched up. I remember, in the 60s, when people saw the cars, houses, highways, supermarkets and domestic machines only in the American movies! Confused At those times, only rich people had telephones  at theirs homes.
If you wanted to know the future you should visit the U.S.
That's not true anymore.

Originally posted by pikeshot1600 pikeshot1600 wrote:


The observed effects of "globalization" seem to be the leveling out of labor costs, the diminishment of working class influence, and the concentration of wealth in fewer hands.  That tends to make it easier for the wealthiest to control the "political aristocracy" by purchasing influence and access to media.  Media can be manipulated to demonize and destroy whoever the adversary of the day might be - unions; political opponents; unpopular social groups, etc.


Absolutely.

Originally posted by pikeshot1600 pikeshot1600 wrote:


The United States will survive as a great power, even if only in the Western Hemisphere,


The U.S. should keep its role of great power where it is loved: Europe, Asia, Israel. In the Western Hemisphere the U.S. is hated and resented almost everywhere, even by those hypocryte Canadians.
Even more, the U.S. hasn't realize has yet that the only aspiration of the region is to increase its commerce and alliance with other parterns, rather than with a declining empire.

Originally posted by pikeshot1600 pikeshot1600 wrote:


and the United States will continue to to be a prosperous alternative to other places to live, but not in the relative sense of 1950 to 1990.  Too many things have changed, and they are basically reverting to the longer term historical reality that existed before that period of anomaly.         


Notice from where the immigrants are comming now. Every year, the immigrants come from even poorer countries than the year before. With the exception of advanced research, top music and media, that country today is not the most attractive place to live, or to grow a family.





Posted By: gcle2003
Date Posted: 27 Feb 2011 at 00:47
For once I'm don't disagree with you Pike (at least not much Smile) However...
Originally posted by pikeshot1600 pikeshot1600 wrote:

Since political interests have come to understand the power of media (since the 1960s), money has come to dominate politics as never before that time.  Media exposure is very expensive.  The "political aristocracy" is not the same as in 1800 when the "rich; the well-born and the able" were considered the rightful arbiters of politics and power.  Now it is just who has the money.
Media exposure is not necessarily expensive, unless left to the so-called 'free' market. One of the problems the US faces, politically rather than economically, insofar as they don't overlap, is that there is not free television/radio time for political parties/candidates. Various counries around here also have free billboard exposure. The alternative, which is to cap the amount of money that can be spent on an electoral campaign, also not uncommon, is also not followed in the US. If, say, Senate candidates were limited to expenditure on campaigning of $1 million, no matter the source, there would e a considerable change in the donimance of moneyed interests in US elections.
Quote
The United States will survive as a great power, even if only in the Western Hemisphere, and the United States will continue to to be a prosperous alternative to other places to live, but not in the relative sense of 1950 to 1990. 
It needs emphasising though that it depends on what the United States does - and how far it faces up to reality.
 
 


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: Al Jassas
Date Posted: 27 Feb 2011 at 02:31
Obviously Graham you haven't heard about the supreme court ruling ( http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission - http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission ) which allowed coportations to directly engage in political advertising.
 
This is tanamout to privitisation of politics itself.
 
Al-Jassas


Posted By: pikeshot1600
Date Posted: 27 Feb 2011 at 04:59
Originally posted by Al Jassas Al Jassas wrote:

Obviously Graham you haven't heard about the supreme court ruling ( http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission - http://en.wikipedia.org/wiki/Citizens_United_v._Federal_Election_Commission ) which allowed coportations to directly engage in political advertising.
 
This is tanamout to privitisation of politics itself.
 
Al-Jassas


I imagine Graham is aware of the decision.  Campaign finance reform has been a political issue (albeit not a very serious one) for some time.  The Court interpreted the Constitutional intent of free speech, and in the absence of specific Federal statutes on campaign finance that might affect it, the decision is the law of the land.

Congress could do something to address that, but I am never optimistic when such action could negatively impact incumbents.  They are happy with the situation the way it is....this way they understand who their real constituents are.  Wink

 


Posted By: Omar al Hashim
Date Posted: 27 Feb 2011 at 07:13
Originally posted by Pike Pike wrote:

Is there a "solution" to the relative decline of the US?  Probably not.

I believe there is, but only if the large majority of Americans lose some silly ideas.
Quote Since political interests have come to understand the power of media (since the 1960s), money has come to dominate politics as never before that time.  Media exposure is very expensive.  The "political aristocracy" is not the same as in 1800 when the "rich; the well-born and the able" were considered the rightful arbiters of politics and power.  Now it is just who has the money.

This is a failure of your democratic system and your media.
Consitutional reform is needed to alter the system to minimise that affect. I'd recommend a state broadcaster and a preferential voting system.
Quote Socialism seems to have discredited itself through unsustainable entitlements; communism seems to have discredited itself through the inability to do anything except to spread poverty around equally.

Totally incorrect. This is nothing but the fantasies of Americans. The single organisation that has been most sucessful in eliminating poverty is the China Communist Party. You may argue that's not "true" communism, but it's as communist as the US is democratic for sure. Every wealthy country in Asia-Pacific is either socialist or communist. Not to mention that Democracy is socialism.
Quote The observed effects of "globalization" seem to be the leveling out of labor costs, the diminishment of working class influence, and the concentration of wealth in fewer hands.

Apart from Labor coasts, and except in the US, I'd say the opposite is true. Globally, working classes are more powerful and wealth is better distributed.


Posted By: Guests
Date Posted: 27 Feb 2011 at 09:55
Originally posted by gcle2003 gcle2003 wrote:

Originally posted by Panther Panther wrote:






That's what I mean by confusing government expenditure with transfer payments. If the government takes a dollar from X and gives it to Y than the government hasn't spent that money: it's still around.
 
Of course at a deeper level it needs to be understood that money spent hasn't gone away or disappeared ionto some oblivion. Money spent has merely been ransferred from one person's (or companie's) pocket to another one, ready to finance another transaction somewhere else. Of course it can be saved, which deprives it of any use, but it still sits around, usually steadily losing value.
 
But the idea that money can be exhausted isn't one that's easy to put over even in economics classes. It'll certainly take more than a few Nobel prize winners.


Of course, The guessing cup game. Keep the money away from the taxpayer.


Posted By: gcle2003
Date Posted: 27 Feb 2011 at 22:19
The guessing cup game?
 
I don't know that one, seriously.
 
In depressions you need to move money from people who would save it to people who will spend it. In booms you need to do the opposite. It's called negative feedback and it's essential to all control systems. ('People' there includes governments and corporations too.)
 
http://en.wikipedia.org/wiki/Negative_feedback - http://en.wikipedia.org/wiki/Negative_feedback
 
Of course in economics you usually look for controlled growth rather that simple stability, so you need less action in booms than in depressions.
 


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: Guests
Date Posted: 28 Feb 2011 at 15:19
Originally posted by gcle2003 gcle2003 wrote:


The guessing cup game?


http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related - http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related

I'm sure there is a name for it, but dummy that i am, i can't think of it right now.

Quote
In depressions you need to move money from people who would save it to people who will spend it. In booms you need to do the opposite. It's called negative feedback and it's essential to all control systems. ('People' there includes governments and corporations too.)
 
Of course in economics you usually look for controlled growth rather that simple stability, so you need less action in booms than in depressions.


When i talk economics with you, i always wind up feeling like "Homer Simpson". DOH!


Posted By: gcle2003
Date Posted: 01 Mar 2011 at 04:58
Originally posted by Panther Panther wrote:

Originally posted by gcle2003 gcle2003 wrote:


The guessing cup game?


http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related - http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related

I'm sure there is a name for it, but dummy that i am, i can't think of it right now.
 
In the UK the similar game with three cards, one of them usually the Queen of Hearts, is called 'Find the Lady' or less picturesquely the Three Card Trick. I can't remember what it's called when you use cups either.
 
On the general point though the intent is not to keep the money away from the 'taxpayer' (i.e. everyone who pays taxes, i.e everyone) but to steer it from one group of taxpayers to another.  


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: pikeshot1600
Date Posted: 01 Mar 2011 at 07:29
Originally posted by gcle2003 gcle2003 wrote:

Originally posted by Panther Panther wrote:

Originally posted by gcle2003 gcle2003 wrote:


The guessing cup game?


http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related - http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related

I'm sure there is a name for it, but dummy that i am, i can't think of it right now.
 
In the UK the similar game with three cards, one of them usually the Queen of Hearts, is called 'Find the Lady' or less picturesquely the Three Card Trick. I can't remember what it's called when you use cups either.
 
On the general point though the intent is not to keep the money away from the 'taxpayer' (i.e. everyone who pays taxes, i.e everyone) but to steer it from one group of taxpayers to another.  


That isn't a game.  That is called politics.  Wink




Posted By: pinguin
Date Posted: 01 Mar 2011 at 09:48
Yes, it is politics: the game that destroy countries.


Posted By: pikeshot1600
Date Posted: 01 Mar 2011 at 10:05
Originally posted by pinguin pinguin wrote:

Yes, it is politics: the game that destroy countries.


I think you should recalibrate.  Politics is two things when it works:

1)  The art of the possible by compromise and accommodation.

2)  The distribution of who gets what and how much of it, predicated on who has the most influence.

Politics may, in fact, be "a very low occupation," but it is much preferable to shooting at one another which is often what happens when politics does not work.








Posted By: pinguin
Date Posted: 01 Mar 2011 at 10:09
Yes, politics is a fine art. The problem are the politicians.


Posted By: Guests
Date Posted: 01 Mar 2011 at 11:17
Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by gcle2003 gcle2003 wrote:

Originally posted by Panther Panther wrote:

Originally posted by gcle2003 gcle2003 wrote:


The guessing cup game?


http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related - http://www.youtube.com/watch?v=qG78kSNqxk0&feature=related

I'm sure there is a name for it, but dummy that i am, i can't think of it right now.
 
In the UK the similar game with three cards, one of them usually the Queen of Hearts, is called 'Find the Lady' or less picturesquely the Three Card Trick. I can't remember what it's called when you use cups either.
 
On the general point though the intent is not to keep the money away from the 'taxpayer' (i.e. everyone who pays taxes, i.e everyone) but to steer it from one group of taxpayers to another.  


That isn't a game.  That is called politics.  Wink




Our politicians sure do act like it's a game. Angry


Posted By: Guests
Date Posted: 01 Mar 2011 at 11:25
Originally posted by pikeshot1600 pikeshot1600 wrote:



Politics may, in fact, be "a very low occupation," but it is much preferable to shooting at one another which is often what happens when politics does not work.


Words of wisdom. However, regardless of political affiliation, a few of our politicians are doing their damnedest too make it all not work by encouraging us to turn against one another with their elimination rhetoric. Thumbs Down


Posted By: gcle2003
Date Posted: 01 Mar 2011 at 21:28
Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by pinguin pinguin wrote:

Yes, it is politics: the game that destroy countries.


I think you should recalibrate.  Politics is two things when it works:

1)  The art of the possible by compromise and accommodation.

2)  The distribution of who gets what and how much of it, predicated on who has the most influence.

Politics may, in fact, be "a very low occupation," but it is much preferable to shooting at one another which is often what happens when politics does not work.
 
I thnk you need to add to that that politics is the art of convincing people that what you are recommending benefis them, when in fact it does nothing of the kind. Put another way, that would be making your first point "The art of the possible by compromise and accomodation, but preferably deception."


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: pikeshot1600
Date Posted: 02 Mar 2011 at 00:14
Originally posted by gcle2003 gcle2003 wrote:

Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by pinguin pinguin wrote:

Yes, it is politics: the game that destroy countries.


I think you should recalibrate.  Politics is two things when it works:

1)  The art of the possible by compromise and accommodation.

2)  The distribution of who gets what and how much of it, predicated on who has the most influence.

Politics may, in fact, be "a very low occupation," but it is much preferable to shooting at one another which is often what happens when politics does not work.
 
I thnk you need to add to that that politics is the art of convincing people that what you are recommending benefis them, when in fact it does nothing of the kind. Put another way, that would be making your first point "The art of the possible by compromise and accomodation, but preferably deception."


What?  Politicians deceive and lie?  I had no idea!

But so do business executives and bankers and school administrators and attorneys and salesmen and children and parents.  Almost everyone lies...often a lot, and certainly more than should be done, and it isn't going to change.  Hopefully, as we age the B.S. Detector becomes more engaged, but from what I see, it doesn't look like that happens much.




Posted By: gcle2003
Date Posted: 02 Mar 2011 at 00:29
Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by gcle2003 gcle2003 wrote:

 
I thnk you need to add to that that politics is the art of convincing people that what you are recommending benefis them, when in fact it does nothing of the kind. Put another way, that would be making your first point "The art of the possible by compromise and accomodation, but preferably deception."


What?  Politicians deceive and lie?  I had no idea!

But so do business executives and bankers and school administrators and attorneys and salesmen and children and parents.  Almost everyone lies...often a lot, and certainly more than should be done, and it isn't going to change. 
That's all politics, which are not necessarily national politics. Now you're talking about the field of micro-politics, parallelling micro-economics.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: fantasus
Date Posted: 02 Mar 2011 at 05:42
Depending upon what is meant by "US decline" I am a bit curious about what the problem is, and not least who has a problem? It is not at all unimaginable that in countries loosing status as powers most of the population can gain better standards of living, health, liberties, etcetera. Nor that a majority of humans can.


Posted By: gcle2003
Date Posted: 02 Mar 2011 at 07:50
Good point. Britain never lost status and power faster than in the Conservative government of 1955-59 but MacMillan still won in '59 on the basis of the slogan "You never had it so good" which for most people was undoubtedly true.

-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: fantasus
Date Posted: 02 Mar 2011 at 08:16
The European Great Powers were probably never as powerful as in the decades before the first world war, were they dominated most of the rest of the world. Still in many respects their lot in many countires  improved much especially in the decades after 1945, were their situation had reversed.


Posted By: pikeshot1600
Date Posted: 02 Mar 2011 at 08:58
Originally posted by fantasus fantasus wrote:

The European Great Powers were probably never as powerful as in the decades before the first world war, were they dominated most of the rest of the world. Still in many respects their lot in many countires  improved much especially in the decades after 1945, were their situation had reversed.


In the decades after 1945, the European (former) colonial powers were laying off a disproportionate amount of their defense expenditure on North America.  Of course their lot improved.

The USSR was 500 miles away to the east, and the bankroll was coming from 3,000 miles to the west.




Posted By: gcle2003
Date Posted: 02 Mar 2011 at 22:14
You forget Britain and France had the bomb. With no shilly shallying they had announded they would rely on first use to defend themselves, so anyone attacking would have been hit by nuclear weapons immediately, or at least run the risk of doing so. The rest of Western Europe had that nuclear umbrella to rely on for defence, and no need for an offensive capability. Only Britain and France had any need for foreign entanglements, and they both paid for their own.
 
It was the non-nuclear defence that cost money. And that was largely seen as necessary by the US.
 
Of course it is true that some European countries made a pretty good deal out of supporting US bases (and British ones), but that's not saving on their own defence but charging someone else for their ideas of defence.
 
Also of course European countries and Japan, having been hit hard by the destruction of ww2 were in a much better position to rebuild, and nothing makes GDP shoot up faster than having to rebuild after a destructive catastrophe.


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.



Posted By: fantasus
Date Posted: 03 Mar 2011 at 07:25
Originally posted by gcle2003 gcle2003 wrote:

 
Also of course European countries and Japan, having been hit hard by the destruction of ww2 were in a much better position to rebuild, and nothing makes GDP shoot up faster than having to rebuild after a destructive catastrophe.
A tempting explanation perhaps, but not necessarily true. The degree of destruction differed extremely, and the correspondence with economic development is not at all that obvious.


Posted By: Captain Vancouver
Date Posted: 03 Mar 2011 at 11:14
Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by Al Jassas Al Jassas wrote:

Originally posted by pikeshot1600 pikeshot1600 wrote:

Originally posted by Al Jassas Al Jassas wrote:

Hello to you all
 
Thanks for Graham for explaining what I was saying. Warren Buffet if I am not mistaken pays around 17% of his income as taxes while the combined federal (forget state) taxes are around 30%. The average income taxes payed by the top 400 taxpayers is around 16%:
http://www.cbpp.org/cms/index.cfm?fa=view&id=3090 - http://www.cbpp.org/cms/index.cfm?fa=view&id=3090
 
This is the problem with the US. Rich people pay less rates than lower income people squeezing the lower income people and damaging the economy. A fairer tax system will cancel all that.
 
Al-Jassas
 
 


Al, as long as the political aristocracy are disproportionately multi-millionaires paying 16%, it ain't gonna happen.




 
And isn't it the people who gave that aristocracy the power in the first place?
 
Seeing the current political landscape of the US and to a lesser extent other countries I couldn't but help noticing the similarities between today's corporate political class and the Liberals (particularly the utilitarians) who dominated european economic policies in the 1820s untill the middle of the 19th century. Should we expect a second coming for socialism/communism?
 
Al-Jassas
 


Since political interests have come to understand the power of media (since the 1960s), money has come to dominate politics as never before that time.  Media exposure is very expensive.  The "political aristocracy" is not the same as in 1800 when the "rich; the well-born and the able" were considered the rightful arbiters of politics and power.  Now it is just who has the money.

Corporate or other established financial interests now manipulate, and in essence control, elected representatives through their influence over those representatives' financial requirements...."you want media exposure, we'll help pay for it - for a price."

Socialism seems to have discredited itself through unsustainable entitlements; communism seems to have discredited itself through the inability to do anything except to spread poverty around equally. 

Is there a "solution" to the relative decline of the US?  Probably not.  Adapting to the reality that the disproportionate allocation of prosperity that existed, 1950 - 1980/90 is over is probably the best that can be expected.  Realistically, the prosperity that was thought to exist, or that could be expected, was an historical anomaly that could never be sustained.  The return to a more usual reality of basic subsistence and to more modest expectations seems to be in order.  What that may mean for the outraged dis-entitled citizen, or the dis-enfranchised union member has yet to be determined.

The observed effects of "globalization" seem to be the leveling out of labor costs, the diminishment of working class influence, and the concentration of wealth in fewer hands.  That tends to make it easier for the wealthiest to control the "political aristocracy" by purchasing influence and access to media.  Media can be manipulated to demonize and destroy whoever the adversary of the day might be - unions; political opponents; unpopular social groups, etc.

The United States will survive as a great power, even if only in the Western Hemisphere, and the United States will continue to to be a prosperous alternative to other places to live, but not in the relative sense of 1950 to 1990.  Too many things have changed, and they are basically reverting to the longer term historical reality that existed before that period of anomaly.

          
 
 
I'd suggest that the anomoly of the 1950-80 period was that it was actually a sustainable one, bracketed by a longer period of greed invoked bust and boom. The '30s was an almost terminal bust, saved only by the application of what could be described as socialist measures. We returned to the precipice again in '08, and again the world was saved by the application of socialism, in this case corporate welfare, something the business community finds no problem with, as apposed to benefits for individuals, which go against the laws of god and common sense, as they see it.
 
This period was sustainable because it had an economy that urged the continual recirculation of money, and also the flow of capital into relatively worthwhile projects, rather than into personal wealth and ostentation. The factors that helped to ensure this are the very ones being chipped away at today: labour unions, social programs, a progressive tax system.
 
It is only those mesmerized by the corporate line that believe that, in a country with one of the highest per capita GDPs in the world, citizens cannot afford the very same things others of a relatively similar position most certainly can, like a universal health care system, pensions that are on a sustainable financial basis, and other benefits taken as a given.


Posted By: opuslola
Date Posted: 03 Mar 2011 at 12:11
Just how many times to  have to type these words?
 
Taxes levied upon corporations and other businesses within the USA and the World, do not result in those "Capitalist" entities actually paying.
 
http://en.wikipedia.org/wiki/Capitalism - http://en.wikipedia.org/wiki/Capitalism
 
Instead, these so called "taxes" are merely moved into the "cost of doing business", in their "balance sheets!"  If you do not know what in the hell I am speaking of then you do not know anything about economics!
 
It is the ultimate consumer, in "all" cases, that eventually pay these so called "taxes upon the rich!"
 
To make a quote from a great movie "The God's must be crazy?"
 
And so are most of you!
 
Regards anyway!


-------------
"History, a distillation of rumour."-Thomas Carlyle

http://en.wikipedia.org/wiki/Thomas_Carlyle


Posted By: Guests
Date Posted: 03 Mar 2011 at 12:50
Originally posted by opuslola opuslola wrote:

Just how many times to  have to type these words?
 
Taxes levied upon corporations and other businesses within the USA and the World, do not result in those "Capitalist" entities actually paying.
 
http://en.wikipedia.org/wiki/Capitalism - http://en.wikipedia.org/wiki/Capitalism
 
Instead, these so called "taxes" are merely moved into the "cost of doing business", in their "balance sheets!"  If you do not know what in the hell I am speaking of then you do not know anything about economics!
 
It is the ultimate consumer, in "all" cases, that eventually pay these so called "taxes upon the rich!"
 
To make a quote from a great movie "The God's must be crazy?"
 
And so are most of you!
 
Regards anyway!


Hi opuslola,

I am curious as to why you think the business will always without fail pass on the cost of increased tax liabilities to the consumer. Where is your evidence for this?

As opposed, for example, to the company absorbing the entire cost or part of the cost of the tax liability. If a product is too highly priced because the company includes these prices in the product cost, then consumers may think that the price is inherently too high and simply decide to do without the commodity. The only way for the company to prevent a massive loss in market share and quantity of purchases would be to absorb some of the cost out of profits.

Faced with a choice between losing most of their market and reducing the bonuses and dividends paid to executives and shareholders - most companies would wisely vote in favour of the long term success of the company and choose to absorb some of the cost rather than losing long term customer patronage. And the fact remains that most large businesses can afford to do this, perhaps only a few such as the airline industry as earning such threadbare profits that they have no choice but to pass on the cost to the consumer.

It will differ from one circumstance to another, of course, but I do not think that the conclusion that the business will always saddle the consumer with increased tax liabilities is necessarily true.


Posted By: Omar al Hashim
Date Posted: 03 Mar 2011 at 13:49
Especially if you tax luxuries and privlidges that people don't need and can do without.
 
Gambling, alcohol, designer clothing, luxury cars. There should be taxed such that anyone who wishes to indulge in them is paying a large proportion of the cost into the coffers of social security programs.


Posted By: opuslola
Date Posted: 03 Mar 2011 at 14:11
My dear Constantine XI!
You must be frigging kidding me?  Just why would a company absorb a tax that applies to all companies doing business in the same manner?  Just to get a small increase in sales?  NO!   In most instances the "bean counters"/financial managers/tax specialists, will merely do just what the competetion would do, that is pass this new tax onto the receiver of the goods or services that every one else must also do!
 
Otherwise, you might, for a short time, control the orders, but in the long term, you would end up having to explain to the stock holders just why the profit margin fell!


-------------
"History, a distillation of rumour."-Thomas Carlyle

http://en.wikipedia.org/wiki/Thomas_Carlyle


Posted By: Guests
Date Posted: 03 Mar 2011 at 14:57
Originally posted by opuslola opuslola wrote:

You must be frigging kidding me?  Just why would a company absorb a tax that applies to all companies doing business in the same manner?  Just to get a small increase in sales?  NO!


Because then they occupy the position of market leader in terms of cost, allowing them to capture a larger share of the market, thereby increasing profits and also denying profits to their competitors...

People often have a rough figure in their mind of how much they think a commidity is worth - and they will go without that commodity if they think the price is too high. For example, in 1932 the British government introduced a new tax on many 'luxuries' to impress the Americans into giving them a loan by proving they could be fiscally disciplined. One such luxury was beer. Despite increasing the tax on beer by a large fraction, government revenues on the sale of beer fell dramatically because brewers could not absorb the cost and ordinary people thought the prices extortionate compared to what they thought a beer was really worth.

Quote In most instances the "bean counters"/financial managers/tax specialists, will merely do just what the competetion would do, that is pass this new tax onto the receiver of the goods or services that every one else must also do!


I won't deny that this does happen. But it is not bound to happen. Managers must assess the impact of their pricing policy to reach the optimal combination of high price with large market share. Just 'doing what everyone else does' is not exactly an inspired pricing strategy.

Quote Otherwise, you might, for a short time, control the orders, but in the long term, you would end up having to explain to the stock holders just why the profit margin fell!


Or they might find their market share collapsing as the competition picks off their customer base through the advantage of cost leadership - which is far worse news for shareholders than a temporary reduction in dividend payouts.

One thing we are taught at university is that if a customer for whatever reason becomes dissatisfied with a supplier and tries an alternative, there is a 70% chance they won't be back.

Only through oligopoly and price fixing can companies ensure that the customer always absorbs any increasing cost with no risk to the shareholder - a practice which is of course anti-competitive and should be prevented by government bodies.


Posted By: Al Jassas
Date Posted: 03 Mar 2011 at 15:03
Originally posted by opuslola opuslola wrote:

Just how many times to  have to type these words?
 
Taxes levied upon corporations and other businesses within the USA and the World, do not result in those "Capitalist" entities actually paying.
 
http://en.wikipedia.org/wiki/Capitalism - http://en.wikipedia.org/wiki/Capitalism
 
Instead, these so called "taxes" are merely moved into the "cost of doing business", in their "balance sheets!"  If you do not know what in the hell I am speaking of then you do not know anything about economics!
 
It is the ultimate consumer, in "all" cases, that eventually pay these so called "taxes upon the rich!"
 
To make a quote from a great movie "The God's must be crazy?"
 
And so are most of you!
 
Regards anyway!
 
The biggest problem with this logic is that it doesn't explain why corporations that get a negative tax rate (that is get tax credit for taxes it didn't pay) keep hiking their prices instead of reducing them?
 
Case in point Energy companies in the US. They pay on average less than 10% (if they didn't get an outright subsidy/credit) and yet keep energy prices high (not just gas but Diesel, heating oil etc.):
http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html?_r=2&ref=davidleonhardt - http://www.nytimes.com/2011/02/02/business/economy/02leonhardt.html?_r=2&ref=davidleonhardt
 
Al-Jassas


Posted By: gcle2003
Date Posted: 04 Mar 2011 at 02:12
What opuslola overlooks/is ignorant of is that all expenditures made by a corporation are costs of doing business, including the payments made to shareholders as dividends, and the attribution of 'retained' earnings to the shareholders' account.
 
The value of the corporation itself at any point in time is exactly zero: it has assets and liabilities that exactly balance, and those liabilities include what it owes to the shareholders (the equity) along with all its other debt.
 
So the result of increasing tax is exactly the same as the result of any other change in expenditure. It must be matched by a decrease in one or all of the other costs of doing business, including profit
and wages, salaries and bonuses, or by an increase in income. Which of those is possible in any given environment is, as Constantine points out, dependent of skilled analysis of the situation plus a great deal of guessing and luck.
 
How come companies tend to oppose wage increases asked for by unions? If it is so easy to pass costs of doing business on to the customer, why not do the same thing with wages?


-------------
Citizen of Ankh-Morpork.

Never believe anything until it has been officially denied - Sir Humphrey Appleby, 1984.




Print Page | Close Window

Forum Software by Web Wiz Forums® version 12.01 - http://www.webwizforums.com
Copyright ©2001-2018 Web Wiz Ltd. - https://www.webwiz.net