Depression Economics 101

[Roothead]

Agree with COG on the tax system - it is a money tree to special interests.... the more complex it became, the more they could finesse the current tax system to support their agendas.... a simple system that take a % of every dollar "earned" (along with an iron-clad definition of what 'earned' really means), over and above a certain base level - say $20k/yr, would be a good start.... our tax system is like the bureaucracies in all other nations - rules are corrupted to benefit a small section of the population... then it is repeated over and over again

[waverunner234]

Originally Posted by theaustinescorts

No matter how much finance is available nothing is pulling the US out of high unemployment. This is permanent.

I THINK I'VE SAID THIS MONTHS AGO

[joe bloe]

Originally Posted by waverunner234

I THINK I'VE SAID THIS MONTHS AGO

The problem is the crushing debt burden. That's the X factor. Turning this thing around is going to take a disciplined long term strategy of downsizing the government and reducing spending. It may not be possible, because of the political realities of asking people to sacrifice today for benefits tommorow. Just look at what's happening in Europe. France just put the socialists back in power. The Greeks are rioting in the streets because of austerity measures. When the feds finally starting reducing entitlement spending in America, there will be rioting that will make Greece seem like nothing.

[theaustinescorts]

Originally Posted by JD Barleycorn

We can remove regulations (and we should remove all unnecessary regs) but that is only part of the problem. We cannot compete with overseas wages but there is so much that keeping jobs here can avoid; insurrections, epidemics, corruption, illiteracy, different langauges and customs.

We also need to change the tax code in order to keep the money in this country. A company produces a product which it then sells to customers. A profit is made by the company after paying corporate taxes, property taxes, state taxes, etc. The left over is paid to employees through paychecks and benefits including healthcare, unemployment, and social security taxes. Anything left goes to pay the owner or stockholders.

In large corporations the owners or stockholders don't see anything from revenues...zilch. Gone are the days when corporations payed out dividends because owners today are nothing more than speculators who only care about the stock price and make no demands at all for any distribution of profits to them.

Because of this nasty situation management simply loots all available profits by spending the funds on themselves.

Gordon Gekko was totally right about this in his 1987 speach to the Teldar Paper shareholders. I wonder if he ever finished buying that company before he went to prison?

IMHO one major thing the US must do to make domestic industry more competitive is to eliminate all taxes on businesses of any kind...ZERO.
All these taxes are passed on to the consumers anyway so why not just let them pay it directly to the government.

[CuteOldGuy]

Excuse me, if corporate investors don't receive anything from the corporation, why do they invest? If all they care about is the stock price rising, how does that happen if the executives hoard all the money for themselves?

With all due respect, AustinE, you really don't know what you're talking about. The companies where the executives hoard all the money generally go out of business. Companies, say, like Solyndra.

But you are right, if we must have income taxation, (which is anathema to freedom), income should only be taxed once. Oddly, that was a campaign theme of Jimmy Carter, one of the few things he got right.

[theaustinescorts]

It used to be that all publically traded companies payed out dividends every year. Now almost none do.

So what happens to all the revenue that could be declared as profits?

All these revenues are SPENT.....used as deductions for taxes.

What are they spent on? Everything that benefits management, including management compensation, bigger expense accounts, more mid and lower lever bodies to actually do all the work, etc..etc...

What's leftover after this spending is socked away as cash balances in banks, but NEVER payed out to shareholders.

This is the reason why corportation cash accounts HAVE NEVER BEEN HIGHER than during this current recession.


Cuteguy:

I'm anti-government because to me liberty is a necessity of life, not because I romantice private enterprise. Private enterprise is just as corrupt and malicious as government, but it can be managed and competed against whereas the monopoly of power within government cannot.

[CuteOldGuy]

Originally Posted by theaustinescorts

Cuteguy:

I'm anti-government because to me liberty is a necessity of life, not because I romantice private enterprise. Private enterprise is just as corrupt and malicious as government, but it can be managed and competed against whereas the monopoly of power within government cannot.

Well, I don't agree with the rest of your post, but you are spot on with this. If we had a truly free society, the crony capitalists could not exist. They are protected by government. They own the government, and you can be sure, government will not reform them, regardless of the platitudes they try to feed us. The only Kryptonite that is effective on crony capitalists is a free people.

[Laz]

Manufacturing overseas has costs to it that manufacturing locally would not. That offsets a lot of the cheap labor issue. If we also had the fair tax then the tax advantages of manufacturing overseas would also be gone.

[theaustinescorts]

Originally Posted by Laz

Manufacturing overseas has costs to it that manufacturing locally would not. That offsets a lot of the cheap labor issue. If we also had the fair tax then the tax advantages of manufacturing overseas would also be gone.

One of the costs overseas is paying bribes to the thugs who run those places. You can't get anywhere in those horrible countries, and that includes China, without lining the pockets of the local political mafias.

Adding up all those costs it's still cheaper to manufacture overseas or everybody wouldn't be doing it.

I don't know what the "fair tax" is, and I don't like any proposal with a euphamistic name.

The best thing is to eliminate all taxes on business...period.

It's the poor public who pays for it anyway.

[CuteOldGuy]

Learn about the FairTax. I agree, I don't like the cutesy name, but it is the most solid, economy boosting and liberty-compatible proposal out there. It is currently being debated in the House as HR 25. The main problem with the FairTax is that it severely limits the power of politicians to raise money and power, and to demagogue.

http://www.fairtax.org/site/PageServer

There are a lot of lies out there about the FairTax, but if you read for yourself what it is and how it works, you'll see that this is the best program out there.

[joe bloe]

Originally Posted by CuteOldGuy

Learn about the FairTax. I agree, I don't like the cutesy name, but it is the most solid, economy boosting and liberty-compatible proposal out there. It is currently being debated in the House as HR 25. The main problem with the FairTax is that it severely limits the power of politicians to raise money and power, and to demagogue.

http://www.fairtax.org/site/PageServer

There are a lot of lies out there about the FairTax, but if you read for yourself what it is and how it works, you'll see that this is the best program out there.

I'm a big Hugh Hewitt fan. I'm also a big fan of the Fair Tax. Hugh Hewitt says the Fair Tax will never work, and he makes a pretty convincing argument. He wrote a book on the subject, "The Fair Tax Fantasy." So now, I have mixed feelings.

The issue is probably moot, because I don't think the Fair Tax can be sold to the majority of the people.

http://www.hughhewitt.com/transcript...0-467cddc26b0a

[CuteOldGuy]

I think the FairTax and its hundreds of economists can withstand any attacks from Hugh Hewitt. But I'll make a deal, let's enact it, and if it doesn't work, we can reinstitute our current system.

The FairTax is the most completely reviewed and vetted tax program ever. The reason it will not likely be adopted is not because it won't work. It is precisely because it WILL work. Because when it works, politicians have much less power, and can raise far less money for their campaigns.

[Laz]

Originally Posted by theaustinescorts

I don't know what the "fair tax" is, and I don't like any proposal with a euphamistic name.

The best thing is to eliminate all taxes on business...period.

The fair tax is a consumption tax and would eliminate the taxes on businesses. The tax is paid when a product is purchased and that would apply the same tax to products manufactured overseas that is charged on products manufactured here.

[joe bloe]

Originally Posted by CuteOldGuy

I think the FairTax and its hundreds of economists can withstand any attacks from Hugh Hewitt. But I'll make a deal, let's enact it, and if it doesn't work, we can reinstitute our current system.

The FairTax is the most completely reviewed and vetted tax program ever. The reason it will not likely be adopted is not because it won't work. It is precisely because it WILL work. Because when it works, politicians have much less power, and can raise far less money for their campaigns.

It's bound to be better than what we've got, but that's not saying much. The biggest hurdle to getting the Fair Tax passed into law is that the socialists will say it benefits the rich. I'm pretty sure all the support for the Fair Tax is on the right, I could be wrong.

I'd love to see Neal Boortz and Hugh Hewitt debate the Fair Tax. They've both written books on the subject, pro and con.

[CuteOldGuy]

Socialists always say that. Especially when their power is threatened.

I'm reading Hewitt from the link you posted, and I'm only partly into it, and already he is intentionally misstating the FairTax. He's been good on other topics, but I can already tell he's not telling the truth this time.

In fact, as I read, it's the same demagoguery I read on the statist's websites. For some reason, he is distorting the FairTax for his own ends. Sorry, Joe. This guy is not reliable on this topic.

Boortz would cream this guy in a debate. Because Boortz will know what he is talking about.