Yup

This is an interesting post. I will re read it and then comment.

So… are we basically discussing ‘context’?

This is a very important post. Thanks, And, one could add more too, by looking at the larger issue of place even within the U.S. – NY metropolitan area vs Cleveland. Couple that with class/parental wealth – both here and elsewhere and it makes the whole even more notable.

Yeah, I mostly left parents out of it, but I’d say 90% or so of you worth is where you’re born, 90% of what’s left is who your parents were. The rest is you. (There are always exceptions, of course, I’m talking in general.)

Would you care to comment on the realities of going back to the gold standard?

A lot of food for thought here. If it’s not my money, do I have to give it back?

Oh I love being in the thicket of economic theory. :0)

Wrote an entire article on that, in effect, Kiddo. The supply of gold doesn’t track the actual economic base, so I don’t support it.

And who then is the government?

THREW a triple? Are you a brit?

If the government asks for it, yeah, pretty much.

Let’s put it this way — it’s your money as much as it is any other American’s: as a group you and other Americans and your ancestors have created the value of the US dollar.

Canadian. We tend towards British english.

A government that doesn’t insure it’s right to taxation is no government at all- it would starve in a millisecond- so if one is to live in a world with a government- and not in the “state of nature” where life is brutish and short, one will have taxation. Now let’s talk about HOW MUCH? The answer is “enough to cover the costs”.

Ian

OK- you are forgiven!

That’s a proper argument. But could I ask what is the “actual economic base”? Would it be oil perhaps? Or something I have not considered? I am not being flippant here.

Baseball gods forgive him for he knoweth not what he saith.

But what are the costs? That’s the question, isn’t it? And opinions differ.

It used to be industrial machinery and land. Right now it’s probably energy, because energy is the bottleneck resource. A properly functioning economy able to raise all boats tries to make sure there is never a bottleneck resource.

Yes-exactly- but before jumping to that- there is a minor victory to be had just by gettin yer average gooper to admit that the government should tax enough to cover the costs of government- which precludes tax cuts willy nilly that get put on the card.

Richard Nixon I believe closed the deal on getting rid of the gold standard. Which of course for this progressive almost automatically makes the deal suspect.

Abandoned Gold Standard Guarantees Inflation

http://cmi-gold-silver.com/gol…..money.html

I wonder if we’re investing enough in our human resources: education, health, integrating the disabled, etc. It’s not a bottleneck, but relative disinvestment in these areas–letting them slide at a suboptimal level–will hurt our productive capacity in the long run, in addition to any moral arguments about whether these are good things to do.

(Of course governments will sometimes engage in deficit spending for short periods to stimulate growth during tough times- but that should not become the norm.)

Don’t see much written about the time to turn off the deficit spending tap.

And if you have a gold standard you get long periods of deflation.

“I wonder if we’re investing enough in our human resources: education, health, integrating the disabled, etc.”

The short answer in our view is no. Others, as you may very well know better than we, may not agree. L. is reading these comments tonight and says hello. ;0)

Great post, Ian,

I think this really does not occur to very many people, even liberals. It’s obvious after attention is drawn to it but I still think there is resistance to really taking the concept on board.

Have you done a similar piece on how social security taxes also should not be thought of as “my money” that I’d prefer to invest myself?

Thanks,

Joel Mael

I seem to recall a ‘Cross of Gold’ speech by William Jennings Bryant…

Check. But not ‘mate’. Some argue that way too much available credit is a strong contributer if not a sufficient defining condition leading to our present, and possibly horrendous economic problems coming down the road in a short while.

I haven’t, though I suppose I could. SS, in addition to the humanitarian concern, help spread demand out and help free up younger workers.

They say we passed an unconstitutional law. I deny it. The income tax was not unconstitutional when it was passed. It was not unconstitutional when it went before the Supreme Court for the first time. It did not become unconstitutional until one judge changed his mind; and we cannot be expected to know when a judge will change his mind.

The income tax is a just law. It simply intends to put the burdens of government justly upon the backs of the people. I am in favor of an income tax. When I find a man who is not willing to pay his share of the burden of the government which protects him, I find a man who is unworthy to enjoy the blessings of a government like ours.

(From the Cross of Gold)

Sure. But there are other ways to limit credit. They all come down to society wanting to limit credit enough.

Glad I didn’t miss this, Ian. I look forward to your threads. Americans have a difficult time understanding just what capitalism and self-reliance really means. They are so caught up in this false notion of “the individual” and me, mine, my.

Any society is greater than one of its parts. Money is one of the parts. From the moment we are born we are part of an interdependent group; I don’t care how much money a person has they will die if they are not part of the entire infrastructure, governance, education, and all the other parts that make up the whole.

I have no idea how a person is self-reliant unless they dismiss all the parts as Ayn Rand does and just focuses on the detail of capitalism. The last time I tried drinking water from a quasi source, I was damn sick for a long time. I really count on all the parts of the society.

Here is what I count on: streets where I can walk, roads where I can drive, clean drinking so I don’t drop dead, street lights so I’m not mugged, the fire department, Forest fire fighters so my entire town doesn’t go up in flames, the police, traffic control (please, nuts drive), convient food locations, sewerage, electricity to my door to name a few.

This is hardly self-reliance no matter how much money you have. A lot of people pay so I can have these services. Could it be….no….god forbid….collective money. Wash my mouth out with soap!

An easy fix is to raise the cap from $89,000 to $250,000 and make it a locked box…

So it’s oil? And if so, then can we also conclude that’s the “real” reason we went into Iraq, and will perhaps, or probably, sooner or later, enter Iran?

And it resonates to this day…! ;-)

Yup. That would work.

Oil is the current bottleneck resource, and the dollar is acting the way you would expect it to as a result. Goldbugs almost got it, except they think gold still matters as much as it used to.

Iraq would never have been invaded if it didn’t have oil, but from an oil perspective it is so far a failure — the oil is not online in sufficient quantities. It needed to go online, at larger than historical volumes (no reason why not, Saddam was not producing to capacity) quickly. Failure of that to happen was the main economic gamble the Bush administration made and lost.

Finally a progressive takes on Ronald Reagan and the philosophical underpinnings of Reaganomics. And it couldn’t be timelier. With the Paul campaign, the healthcare crisis, and the collapsing economy, there will never be a better time to ATTACK. And there is no way to get a progressive economy without going after the philosophical underpinning of the current nightmare — and to that extent Obama was right when he said that for a long time now the GOP has been the party of ideas. And it’s high time we attack those ideas. And Ian has nailed the basis idea for this whole nightmare. Thanks Ian.

But of course that might for some of us beg the question of whether it’s “society” or the government (political parties in power and their varied political and financial connections) and/or the lending industry who actually regulates credit limits?

SS is easy to fix. It just keeps up with the changes of the times. To do away with SS and privatize it is just another capitalistic excuse to make money off the backs of workers.

Gawd I love economics. Nothing ever really gets decided.

Gold standard or no gold standard, if the rest of the Great Depression financial laws had been left in place, and if the FED and SEC had done their job, we’d be fine.

In 1973, iirc, the SEC proposed getting rid of the short sale uptick rule (you could only sell short on an uptick of the security). There was a huge PUBLIC outcry and they dropped it.

A couple years ago they suggested the same thing, no one noticed, and it passed.

People don’t learn from other people’s mistakes. What is happening now was inevitable because of greed and stupidity once those who remembered the roaring 20’s and the Great Depression were no longer around in sufficient numbers. The gold standard is one way to reign in inflation but it has very severe drawbacks.

That so many people now think of their social security taxes primarily as their ‘retirement plan’, and ‘their money’ results from the Repubs privatization propaganda.

I don’t know the history of how it was originally sold, but I think of SS as a tax I pay so I will not have to see old people begging in the streets and will not risk having to do so myself. It is NOT my money that I might invest myself.

Dems need to push against the misconception.

Joel Mael

Glass-Stegall restrictions repealed in ‘95 led directly to this Sub-prime mortgage mess we’re in now…!

I think I’ll make myself a monolithic monopoly and control all drinking water. I’ll model my corporation after the banking industry, the energy industry and the military industrial government contract industry. The government won’t regulate me but I will regulate you – how much you pay for water and how much I choose to dribble out to you.

Well, FDR wanted it done the way it is, that people pay into it, so that it could never be taken away from them. It’s a very regressive tax in many ways, but that’s the point.

Privatization is stupid, but fortunately, with the market crashing, hopefully people will understand that. For a large group of people returns will never be better than the market as a whole, and that means that all that matters is administrative costs and they have to be kept as low as possible.

Or to put it another way, if government becomes so bankrupt it can’t pay SS, don’t worry about it, you’ll have other problems.

I really do love economics. Why? Because I never know if I’m right. It gives me hope. No snark. I love the subject. Probably because it’s a supreme challange. And I cannot master it.

Great post on an important topic. I only want to add that Ian Welsh’s attitude is the all-American founding father’s attitude, and that the libertarian and reactionary Bush/Cheney GOP is not.

There are several passages from Benjamin Frnaklin on this topic. The one below sets out his views most completely. A little on the racist side regarding his views of Native Americans, and Franklin wasn’t usually as bad on that point as he is here. But that is a topic for another day.

———————–

The Remissness of our People in Paying Taxes is highly blameable; the Unwillingness to pay them is still more so. I see, in some Resolutions of Town Meetings, a Remonstrance against giving Congress a Power to take, as they call it, the People’s Money out of their Pockets, tho’ only to pay the Interest and Principal of Debts duly contracted. They seem to mistake the Point. Money, justly due from the People, is their Creditors’ Money, and no longer the Money of the People, who, if they withold it, should be compell’d to pay by some Law.

All Property, indeed, except the Savage’s temporary Cabin, his Bow, his Matchcoat, and other little Acquisitions, absolutely necessary for his Subsistence, seems to me to be the Creature of public Convention. Hence the Public has the Right of Regulating Descents, and all other Conveyances of Property, and even of limiting the Quantity and the Uses of it. All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition. He that does not like civil Society on these Terms, let him retire and live among Savages. He can have no right to the benefits of Society, who will not pay his Club towards the Support of it.

Benjamin Franklin to Robert Morris 25 Dec. 1783 Writings 9:138

I’m thinking H20 is a very good investment. Seriously.

Just make taxes optional- like Clusterfuck makes environmental laws optional…

Everyone would get a tax bill sayin “Please forward the amount below- if you feel like it”

Think the goopers would go for that one?

Kiddo – You can create your own economic theory and it will be as good as any other out there;)

Ian, I just discovered Hyman Minsky from this recent New Yorker article:

http://www.newyorker.com/talk/…..k_cassidy/

Do you know much about his writings? I agree quite a bit with his views, at least how the New Yorker presented them. I’m considering learning more about him. His model accurately predicts our current state, and predicts what will happen next.

Would you say the same thing about physics? Chemistry? Mathematics?

Ian, what do you think about this business of sending Americans checks from our indebted government. I can’t for the life of me see why we would borrow MORE money.

Thanks, wesgpc. An excellent citation.

Mr. Welsh: Very good my friend. Very good indeed. ;0)

“People don’t learn from other people’s mistakes. What is happening now was inevitable because of greed and stupidity once those who remembered the roaring 20’s and the Great Depression were no longer around in sufficient numbers. The gold standard is one way to reign in inflation but it has very severe drawbacks.”

I don’t see harm in stimulus or relief, but the way it has been done is phenomenally stupid and mostly pretty pointless. EI extensions and food stamps is where the emphasis should have been.

I confess I’ve never read Minsky. However he sounds right and prescient to me. Thanks for the link, I’m fascinated.

What do the anti taxnuts think will happen if we privatize everything? If anything the Bush administration has shown us is that government provides services that people want cheaper than corporations do who do want to make a profit. So in effect the tax nuts are asking to pay more money.
Plus under Bush nobody is watching the corporations to see that they are actually doing the job that they were paid to do.
For wether its rebuilding New Orleans or Iraq Bush administration government contractors are EXACTLY WHAT REAGEN TALKED ABOUT WHEN HE SAID GOVERNMENT DOESN’T WORK.
Reagen of course objected to government watching corporations to see that they did the job they were paid for.
In conclusion Government should never pay private contractors unless the bids are competitive, and firm with no cost over runs, their should be regular inspections and any corporation that cheats the Government should be banned from future jobs that ban should include any corporate officers of said cheating company like Darth.

All the Property that is necessary to a Man, for the Conservation of the Individual and the Propagation of the Species, is his natural Right, which none can justly deprive him of: But all Property superfluous to such purposes is the Property of the Publick, who, by their Laws, have created it, and who may therefore by other Laws dispose of it, whenever the Welfare of the Publick shall demand such Disposition.

In approximately the same period of time Adam Smith says, if you sit a rich man down to a feast at the dinner table he can only consume so much. And, if you sit a poor man down at the same feast he can only consume approximately the same amount as the rich man. The rest is in excess of one’s need.

Want to add that Jefferson was not a libertarian either. He was a majoritarian, and felt that majority vote should be used to control financial markets and contracts (much more so that would be allowed in current US contract or property law), if public felt regulation necessary for public good. I am not sure even I would be willing to go as far as jefferson -he would be a progressive financial markets radical today (though of course, a ridiculous reactionary on other issues).

I think a very wealthy extremely reactionary, wing of our society has had the money and resources to wage a propaganda war that has falsified the nature of our society and government. One of roles of progressives should be to recover the true basis of US society.

Not saying that we have to worship anyting or those old fart founders (almost all dead whitebread males). You know, slavery, sexism, Native American genocide and all that. But we must know the truth, know our true history both the good and the bad, crtique it and use it constructively to move on from here.

As the great conservative and half-mad John Adams said on his death bed when asked to comment on the meaning of US independence:
“I give you Independence Forever… and not a word more…”

BTW, Adams agreed with Jefferson on financial markets, if on little else.

Right now we are not independent, we are slaves to reactionary propaganda about our history.

i heard a methodist minister once do a sermon on ”it’s god’s money on loan to you”

that all money belongs to god, it is only on loan to you, and what are you doing with it?

shoulda seen my former father-in-law’s face………..self-made man, boy was he pissed.

should be-straight tax on income, no deductions………

cuz more money you make, more deductions you are eligible for, lower incomes don’t have that……..do away with it……..

straight tax on income……….

sometimes wonder if straight tax on purchases would do the same thing, consumption tax, usage tax, dunno……..

no write-offs, even for non-profits-would even out if everyone doing the same thing, cuz a WHOLE lotta people use non-profit standing to purchase tax-free. and it’s not for the non-profit.
or purchase under business name, same thing……as a write-off.

not fair.

x dollar is x tax.

even the plane.

(sorry tax accountants, you would have to find another livelihood…….and my dad was an accountant)

Chimpy McShitheels’ marauders have gone on a looting spree.

5.2 trillion disappears from world markets.

-G

I’ve heard it said in some quarters that deficit spending is good. I believe this view to be wrong. Am I wrong?

oh, and i meant for corporations, too………….

x dollar is x tax

Lots of libertarians are computer geeks. This is a business that doesn’t even exist in any real sense in Banglagesh. It wouldn’t exist here except for the enormous infrastructure built by non-computer geeks, electricity generation and distribution systems, patent protection, immense amounts of r&d from our parents. Libertarians of the Ayn Rand/Alan Greenspan/computer geek variety are hothouse flowers, who survive in this harsh world purely on the labor of others.

I’ve heard it said in some quarters that deficit spending is good. I believe this view to be wrong. Am I wrong?

For the true answer to your question, just see how long you can do it in your everyday life.

The United States is the only country that does not own its central bank.

Our Federal Reserve Bank is privately owned, and it is in ruins, as are all the NYC banks and financial houses. Average per capita incomes buy less every year.

Only the rich benefit in the present economy. They have undermined the American dream.

There are laws in physics and mathematics. Science goes through a rigorous test to prove a theory. Economics is not a science. It is based more on custom. Mathematics is a science.

The impression here is that we’d like to see a post exploring ‘corporate taxes’.

There are many counties in TN where the graduation rate from high school is under 50%. This is a right to work state, and we pride ourselves on our docile workforce, bred to work at low wages in light industry. Nashville touted its fabulous high-tech industry, Dell, which manufactures motherboards and operates a call center. Education, schmeducation.

If I do it long enough and with enough intensity, the feeling here is that sooner or later I will end up in jail. ;0)

Thanks!

Ummm, the property in Paraguay is reported to be on the western hemisphere’s largest fresh water supply.

And that feeling probably has a large amount of truth behind it; at least until they can re-instate debtor’s prisons.

We keep printing money. What exactly is this ‘money’ backed with?

I believe they call it “the full faith and force of the US Government.” IOW, fantasies.

Deficit spending right or wrong? In terms of economics or morality? If you are wondering about the economics then the answer is (as always in economics) -it depends. I do not think there is a competent macro-economist in existence today that would say that short term deficits to smooth consumption and investment over the business cycle is harmful… they would all say it is good and responsible for more stability in economy.

A lot of things we take for granted today, such as unemployment insurance, disability, food stamps, social security and medicare payments play a double role. Besides what they were intended to do in the first place, they provide almost instantaneous automatic funds in recessions to stabilize economic activity. And some of them do generate part of the increases in the deficit that occurs in recessions.

We keep printing money. What exactly is this ‘money’ backed with?
reply

People’s willingness to accept it as payment.

another thing that gets my goat-

and credit interest rates should be the same for everyone………….loans and credit cards. for people and business…………………………………………………

if one person goes to buy a gallon of milk for $2 why should someone else have to pay $4 for it????????……….

it’s the same amount of money, being paid in the same monthly way.

they’re gonna get their money, this bullshit about risk and such and charging differently for the same $200 is ridiculous………

look at how microcredit banking is doing so well, with the ’downtrodden and lowly’ that couldn’t be ’trusted’ to pay back their loans……..they’re paying back at 98%…….higher than their higher class.

same for everyone.

x dollar x tax

same interest for everyone across the board……………………………………………….

Debtors prison was the birth of a nation – Australia. The place was built on the poor soul’s slave labor. They were free to large land holders. It just keeps repeating itself.

Now isn’t that one fine coincidence. Right George, Laura and first Twins? ;0)

Some say love makes the world go ’round. Others remark that it’s money that makes the world go around. I know my view, and my lady says I’m an incurable dreamer and a serious romantic. And as you might suspect, I expect she is right. As usual.

Well if it is a science- it is at best a marginally empirical science- but then so is mathematics if it is a science.

Still- I don’t think it’s the case that anyone’s opinion is equal to anyone elses where economics is concerned.

“It’s Not Your Money”

It is my money. And I stole it fair and square.

Oh boy. Math. I love math. Pretty weird. Huh? ;0)

OT: Obama “smokin’ Hillary in WA and NE:

Nebraska results

CNN already calls it for Obama.
73 percent of precincts reporting:
Obama 69
Clinton 31

WA results:
Per CNN:
35 percent of precincts reporting:
Obama 67
Clinton 32

Sen. Clinton is calling for Shusters head on a pike. “No half hearted apology or temporary suspension will do”.

-G

If truth were told I’m a John Kenneth Galbraith kinda of a guy. So there. I’m finally out of the economic closet. And I feel much better now.

OT: Speaking of mysterious money machines (no, not the Democratic candidates, I mean economics and accounting in general), anyone know what is up with the NRCC fraud investigation?

02.08.08 — 1:58PM // link | recommend (26)
Fiscal Discipline

Rep. Mike Conaway (R-Texas), a certified public accountant, had pushed for months for an internal audit of the National Republican Congressional Committee….

Finally, at a recent meeting, the now former NRCC treasurer, Christopher J. Ward, relented, giving Conaway what was supposed to be an official internal audit from 2006. That document was a fake… Even the letterhead on which it was sent was a forgery.

Revelations about the falsified document touched off an unfolding scandal that has rocked the NRCC and spurred a criminal investigation by the FBI into the committee’s accounting procedures.

….

Knowing the bank was required by law to notify federal investigators of any “suspicious activity,” the NRCC also alerted the FBI, Republican insiders confirmed.

At the same time, NRCC officials notified the FEC that the committee may have filed inaccurate disclosure statements.

http://talkingpointsmemo.com/archives/177641.php

and sorry about all of the …………….

the key was stuck.

keyboard issues, my crux in life…….everybody has one.

Anything to say about Huckabee’s flat tax proposal?

Lahoma has advised me I might not to get into this one. ;0)

that should read might not ‘want’ to…

Totally wrong, but…..

The theory most ‘experts’ are using is deeply flawed. Deeply.

Want to really know why the ‘invisible hand of the market’ doesn’t work?

Want to understand why you can’t predict the stock market?

Want to see conclusive hard data on why markets must be regulated?

Read my post: ‘Theory of Pie’.

And then dig into ‘Complexity Economics’….

Much of this post is supported by this book which outlines the absolute revolution in economic theory which is currently taking place….

And no, ‘they’ don’t want you to be aware of this.

Link doesn’t work for me.

Yeah, I am pretty exhausted with everything.

-G

If we’re in such bad shape economically after over seven years of Republican rule, have I given any thought to how the economy might be behaving under President Huckabee or President McCain?

I wished we could pay each other in snow, because right now, I’d be a multi-bazillionaire. See? ;-)

Faith based tax reductions and shock and awe rebates.

Heaven help us.

-G

Wonder if HRC is doing this to lay down the law that she, and the Democrats in general, will not be messed with as her husband was.

I think the comment itself was nasty and stupid, but Shuster should not be fired over it.

I DO think that comment was indicative of a decayed, depraved empty and corrupt corporate media. It is an indication of a kind of on-air callous and vulgar frat boy mentality that needs to end. So, I cannot argue with HRC’s stand.

I worried momentarily whether I was being hypocritical since I have said rough anf vulgar things in comments here. But I changed my mind. I would be willing to repeat some of the comments I have made about Bush, Cheney, Pelosi and Reid to their faces and defend them, even if the comments were impolite and vulgar. EG: Cheney is a depraved war criminal, a traitor and liar, and punk bully frinstance. Pelosi is naive and cowardly. Reid is a hypocrite.

Can Shuster defend his comment. I doubt it. It was callous stupid gassing, a mindless playing along with a brutal, nihilistic, sexist, racist and class-ist corporate media culture that needs to be exterminated.

Heard Chelsea Clinton interviewed other day -she sounded like a very serious minded, extremely intellegent, focused and autonomous wonk proud of both her parents. Not some one who could every be maninpulated.

I know the feeling my friend. L. says hello. She’s here beside me in the living room on one of her laptops reading your’s and the other comments. ;0)

Hello.

Lahoma

so, ian, please address my comments at 62 and 80, straight tax for everyone, and the credit interest rate issues i addressed…

i really wanna know……..

i can’t understand why people aren’t outraged about this!

is it because they’re all getting the better rates and have plenty of deductions and don’t want others to have them?

that the more you acquire the more you get back? that means the more you spend, the more you get back, how does that make sense? so, those who can’t afford to do that don’t get back? when their dollar is the same as your dollar, just you have more dollars, so you get more dollars??????????

so when you are content in thinking you are of the ’ruling class’, do you not understand that even though you THINK you are getting the best rate-you aren’t, someone is doing to you what you are doing to the under class………business is getting the better rate, in fact, it’s almost for free, gimme money dad, i have a hot date..

half of what you pay at your best rate.

and your sons and daughters are paying out the wazzoooooo because they are young, not because they aren’t credit worthy….

it needs to end

straight tax on every dollar no matter who you are.

Though… if they do fire Shuster over this, then seems to me aabout half the tendentious ignorant empty gassbags, both male and female, we see on those shows should be fired too. Matthews first.

Interesting that Schuster ‘got the chop’ for no more than the truth. Syntax was bad but…

Big fukin’ deal.

Note: PumpkinHaid And the sick, fuck Tweety still on the air still spewing their vile mix of lies, sexism, racism and innuendo.

Schuster a guy who has called ReichWing nutbags on their shit….

Gone.

kiddo says at 102-”

I know the feeling my friend. L. says hello. She’s here beside me in the living room on one of her laptops reading your’s and the other comments. ;0)”

i really wish you would quit ’pimping out’ your girlfriend, kiddo.

(ducking and running from the drink of the evening thrown in my direction)

acitizen-your pie link didn’t work

A straight tax is not something I support, though I’m good with no deductions

If I earn 20K and have a 35% blanket tax rate, I’m left with 13K.

If I earn 200K and have a 35% blanket tax rate, I’m left with 160K.

Since, other than income tax, essentially every other tax in the country is regressive, overall taxation becomes heavily regressive.

If it costs $2,000 for car insurnace, and I earn 20K, that means it’s 10% o f my income. For 200K guy, it’s 1%. If the sales tax is 7% and I spend 5K on food a year, that means I pay $280 a year. As a percentage of my income that’s 2.8%. If 200K guy spends say 10K a year on food (twice what I do) he’s still paying only .5% of his income.

Add on property taxes, etc… and pretty soon 20k guy has hardly any money left, but 200K guy has a ton left.

I will also note that the rich get more out of the country — they fly more, they drive more, they consume more. The companies that make thier money use more resources by far. They benefit more and they use more.

A flat tax winds up meaning an overall taxation system that is very regressive.

There are a ton more reasons I support progressivity, mind you, but that’s a series of essays, not a comment.

As for interest rates, I’ve never supported raising interest rates when someone is in trouble and I strongly believe in anti-usury laws. If someone’s too much of a risk to give money to at 20% he’s too much of a risk to lend money to period, and increasing the interest rate just increases the risk. Just stupid, as well as being immoral.

Heyo Lahoma:)

-G

Or better put A Lack of corporate taxes and Corporate welfare!

This is a great post Ian.
I freely admit my knowledge of this subject is on a par with my cats and to have it spelled out for me is necessary.
I am, however, a very quick study.

ian says: If it costs $2,000 for car insurnace, and I earn 20K, that means it’s 10% o f my income. For 200K guy, it’s 1%. If the sales tax is 7% and I spend 5K on food a year, that means I pay $280 a year. As a percentage of my income that’s 2.8%. If 200K guy spends say 10K a year on food (twice what I do) he’s still paying only .5% of his income.

Add on property taxes, etc… and pretty soon 20k guy has hardly any money left, but 200K guy has a ton left.
=========

the first part, i never thought of it that way, however on the property tax, the 20k guy isn’t livin’ in the palace the 200k is, so, taxes would be even on that one.

but, still would be more fair in the long run, cuz the car insurance on a neon is sure different than a bmw suv.

just sayin’.

ian says-”As for interest rates, I’ve never supported raising interest rates when someone is in trouble and I strongly believe in anti-usury laws. If someone’s too much of a risk to give money to at 20% he’s too much of a risk to lend money to period, and increasing the interest rate just increases the risk. Just stupid, as well as being immoral.”

ian, you don’t have to be in trouble to get crappy rates……….someone with a high-paying job and completely crappy credit gets better rates than someone in a lower paying job with perfect credit.

loook at all of the people with great jobs and 40,000 dollars in credit card debt………

and someone with a lower paying job and great credit can’t even get $2,000 credit.

that is a reality.

i think some of you are missing what is really going on in our country with money………

listening to wall street too much.

it isn’t right.

I’ve lived at the level where I couldn’t even get a chequing account let alone a credit card dmac.

Whoops! Here’s the URL:

http://takeaction.wordpress.co…..-be-valid/

People don’t learn from other people’s mistakes. What is happening now was inevitable because of greed and stupidity once those who remembered the roaring 20’s and the Great Depression were no longer around in sufficient numbers.

Funny thing, tho, people know and then they do the opposite of what they knew. Case in point, Alan Greenspan, from a 1966 article:

The excess credit the Fed pumped into the economy spilled over into the stock market — triggering a fantastic speculative boom. Belatedly, Federal Reserve officials attempted to sop up the excess reserves and finally succeeded in braking the boom. But it was too little too late: by 1929 the speculative imbalances had become so overwhelming that the attempt precipitated a sharp retrenching and a consequent demoralizing of business confidence. As a result, the American economy collapsed.

So when it was his turn, he made the same mistake, expecting a different outcome?

Funny thing about gold: governments, central banks hate it, would trash ‘that barbaric relic’ in a New York minute if it assists the fiat money — and when the chips are really down, they covet it. Perhaps not the answer to everything, but its track record has outlasted any ‘faith-based’ money ever existed.

Didn’t stop the Great Depression, did it? And if you read 19th century economic history you will notice the large numbers of panics, depressions and deflationary periords. Gold’s not the issue.

this may be a little outta left field, but how about the VAT? i wrote this morning at Christy’s thread about my adda who made me the liberal I am today. He was so impressed by Europe and thought America treated its working people like crap. But he was always telling me how great the VAT is. It always seemed very regressive to me. Wonder why he was so attracted to it.

Never understood the VAT attraction either, for all that Canada has one.

Ian,

Why did you delete my post?

Did you see something that made you see how wrong you are?

I’m not a mod, I don’t delete comments. I don’t even have the necessary access to delete any comments, including my own. Nor do I even remember your comment.

On behalf of the mods, let me just say that if you can’t make your point without gratuitous insults, then yes, your comments will be removed from the thread.

a great piece Ian, great

I’m late to the show here but I want to document an important point before the thread is locked up;

Since the majority of the money any American earns is a function of being American, not of their own individual virtues, the government has the moral right to tax. And since those who are rich get more from being American than those who are poor, it also has the moral right to take more money from them.

this is perfect except for one word, spoken twice…the word “right”

the moral “right” to tax

the correct word in this paragraph is “obligation”

and it’s more then an “obligation”

it’s an absolute necessity for this society to continue to provide the benefits you spoke about being born American Ian

it’s not “a moral right”

“it’s the necessary obligation” if we are to continue to provide the ability that we are so proud

it’s an obligation

now that I got my point in, I want to elaborate because I see there are still a few people here

businesses use all the assets of America more then everyone else. and people that earn more money then others also use more of the assets

the experts, the tech support, every single person a business hires that came from the education system of this country, did they pay for that education system?

no, the generations before paid, they paid for the roads, the electricity, the school, the bridges, the water works, the streets, the police, the fire dept

and there are bills that have to be paid, the wealthy, once the acquire their wealth all of a sudden want to defer the costs of their profit onto everyone else, the refuse to pay their own bills and claim taxes are “bad”

those taxes are the reason they acquired their wealth in the first place, they don’t want to steal from everyone from the past and our children in the future

good night all

Thanks, Ian, for this great piece. You have the patience and knowledge to break down these things so wonderfully and succinctly. Me, well, Libertarians just make my head explode, so I’m no good to the cause.

Thanks for being such a great resource of sanity. Now I don’t have to kill myself trying to ’splain it to certain people (all White and 99% male, not surprisingly). I can show them them this post and watch their heads explode!

Well, in that case, I’ll repeat the gist of what I said:

The differences in income per capita has to do with the differences in productivity of labor between America and Bangladesh. It does not have anything to do with genetics or simply being born in different countries.

The high incomes that Americans earn relative to Bengalis IS in fact earned and justified because the wages agreed to is voluntary. How can you criticize voluntary agreements unless you want to CHANGE voluntary agreements to fit your own views of fairness?

Let me say this: Bengali businessmen are completely free to pay $47,000 in wages if they want to. But the problem is that they are unable to. Why? It is because the productivity of Bengalis is much smaller than the productivity of American workers. Now, you will say that Bengalis are just as “hard working” as American workers, and you will be right, but only to an extent. Mere physical labor is not enough to generate wealth and prosperity. Intelligence is another factor that contributes to, and is fundamental of, wealth accumulation. But again, labor and intelligence are necessary factors but they are not sufficient.

If a country is to become prosperous, it must have two things (which are in their power to have):

1. Rational society. A society that values property rights, peaceful and non-coerced exchanges, and reason has the foundations for economic progress. It is only when people’s property is safe from theft and heavy taxation will people feel safe in not spending everything they have for fear of having it stolen, but to save and invest it hoping to make a profit. If people do not feel that their money is safe in another person’s hands, then they will not invest money and will consume everything, causing a stagnation in progress.

2. Economic freedom: A society that has economic freedom promotes creativity, innovation, and progress because too many laws and regulations destroy not only the incentives to save and invest, which are the foundations to progress, but also the ability to save whatsoever. If there is too much taxation, start up businesses have no chance of competing with established companies.

The reason WHY a Bengali farmer makes so much less that an American farmer is not BECAUSE he is Bengali and the American farmer is American, no, the reason is because the average American farmer has so much more CAPITAL WEALTH with which to utilize in his job. Per hour of labor work, the American farmer is capable of producing substantially higher amounts of product because he has advanced machinery to use.

The American farmer is making more than the Bengali farmer because he can produce more than the Bengali farmer. The same argument can be used when comparing a Bengali farmer with a Nigerian farmer. Niger is the poorest country in the world, with a per capita income of $280, which is less than Bangladesh. Does this mean Bengalis are genetically superior to Nigerians? No, it simply means that the average Bengali worker is more productive that the average Nigerian worker. And the amount they are less productive is a function of how much less capital they are able to use when working.

If you feel it is unfair that American workers make more than Bengalis, it is wrong to attribute this as chance or luck, where Americans earn more simply because they are born in America. This is not true, either in the factual sense or in the moral sense. We are born where we are born, and no matter where we are born, we each have to deal with our surroundings the best we can.

Yes some people are born into a better country, and this is tragic. But the answer is NOT to make the richer people feel guilty about it. They did not choose where they are born so you cannot make them suffer anything for it by re-distribution. The answer is to make all effort to bring Bangladesh UP towards where America is. The standard of living in America is OBJECTIVELY better than the standard of living in Bangladesh, thus the answer is not to bring America down to Bangladesh, but rather to bring Bangladesh up to America.

The way to do this is for Bangladesh to do what India, China and the rest of Asia have done in the last 50 years, and that is to have more economic freedom, more safety in invested capital, so that one day Bangladesh is a place that investors would like to invest their HARD EARNED money.

The best way to do this is for Bangladesh to cease the childish and destructive faith-based society that has not done it any good. America has not held Bangladesh back, so you absolutely cannot bring America into this. It is not America’s fault that Bengali people make so little. People need to take responsibility for their own actions. The GOVERNMENT of Bangladesh has held Bangladesh back by not being tougher on property rights, economic freedom, and by lacking reason.

The record of the world is crystal clear. The further away a country moves from capitalism and free enterprise, the more poverty stricken that country will be. If you are so upset about Bangladesh being so poor, where you see people born into poverty, then you have only two choices:

Either YOU personally invest in Bangladesh with your own money, and hire workers to manufacture products or provide services that you think the market wants, or

You educate yourself first about free market economics, and THEN talk about how to raise Bangladesh out of poverty by teaching others the nature of economics and prosperity.

Anything else and you will either violate the rights of other people (which in a civilized world should NOT be allowed), or you will keep yourself ignorant of the principles of economics and you will never get out of your funk of morose jealousy and hatred.

If you want to stop the voices in your head, the answer does not lie in America and trying to bring her down. It lies with YOU and what YOU can do to help Bangladesh (and Niger, who need it even more than Bangladesh).

Unless and until you understand how economics works, you will NEVER be a happy person on the inside. You will always live with an unearned guilt of why it is so good here and why it is so horrible in Bangladesh.

Once you understand WHY things are the way they are, THEN you will be able to formulate a solution in your own mind as to what to do for the Bengalis.

Ian, I unfailingly dig your posts (with one teeny exception which I will not link to here because it would in effect just magnify it out of proportion – I feel guilty just in bringing it up… “Oh, what could it be?”)

Anyway, this was spot on, and another tweak at all of us who simply don’t get it that we are all in this together, whether First or Third or “Second” World.

techincally, it’s ALL Uncle Sam’s money

that’s why it has those boring white guys on it

if it really WAS my money, I’d go for nudie pix instead of dead white guys

and fuck signing it all too

you’re just gonna have to take my word for it

Sigh.

a) Productivity is not an individual characteristic, it is a social characteristic. That’s my America has higher productivity than Bangladesh.

2) Yup. Now, did you choose to be born in a society with all those things you list? Did you create them personally?

You missed the point of the article almost entirely. There’s a lot that you say that’s true, but it’s simply irrelevant to the thrust of the article or it actually agrees with me. Again, what makes Americans more productive (for example, the capital goods that farmers have access to) are products of American society as a whole and are not located in the individual. Same thing with American rule of law, and so on. You didn’t create those things, they existed before you were born. And while you contribute to these things now, your contribution would be meaningless if other Americans weren’t also contributing.

I lived in Bangladesh for a while, which is why I chose it as my comparison country. I have a decent idea of some of the things that are wrong with Bangladesh, but this article isn’t about what’s wrong with Bangladesh at all and the fact that you seem to think it is means you have misread the article (oh it could be that I wrote it badly, but no other commenter seemed to miss the point, so I think it’s not my writing, it’s the preconceptions you brought to it.)

You seem like a smart, educated guy so I wish you the best of luck. But if you want to engage an argument you first have to approach it on its own terms. You haven’t done that here.

great response Ian, I would like to elaborate on it;

2) Yup. Now, did you choose to be born in a society with all those things you list? Did you create them personally?

this is what libertarians understand but refuse to acknowledge, that there is a foundation that exists which they have not paid for, nor could they possibly pay for, even if they had more wealth then anyone else, the foundation was built over generations with the entire economy contributing

there are maintenance costs, and if those maintenance costs are not recovered, the foundation collapses and costs MUCH more to rebuild then had it been maintained and modernized

libertarians also don’t understand the in most cases, regulation were put into place to resolve issues corporations caused and refused to pay for themselves, they wanted everyone else to pay their costs

for instance, I remember when you flew over new york and California, the air was literally yellow…this was the crap corporations were pouring into my kids air and they refused to clean up after themselves

we had to write legislation that forced them to pay their own bills because they refused, they literally wanted to steal from everyone else, “why should WE pay for the crap we dump in your kids air?”

and my education, the profession I have is entirely because other people built the schools I went to and paid the teachers salary and most of their education

I would be a very poor man had it not been for the bills that other people paid into our infrastructure and taxes are the method of recovering the expenses I have used getting here

but corporations use the libertarians to make believe they don’t know that these are are not their costs, they want “the market to decide”

the market has decided, we have decided to make corporations pay their own bills, this is our country, not corporations country, if they want to play Baal on our field we set the rules, they are welcome to play on someone else’s field if they don’t like our rules

and there should be additional rules as well

for instance,exporting jobs to a country that doesn’t force them to pay their own bills and then trying to sell it here at reduced price because they have stolen assets from another country’s people

we need to tariff them, there must be “free trade” and they cannot steal their product or the methods they make their product, if they are dumping their crap in my kids air, even if it is in another country, they have to clean up that crap and a tariff is the only way we can have them do it

and they must pay for the roads that people use to buy their product, the education that gives them the jobs and able to buy their product, and the health care for which they would be nowhere if we were all dying.

and that is what libertarians don’t understand, taxes are the method we collect the rent you pay, you must maintain the health and economy of the people you gather the very profit you enjoy because of that health of economy and people

I thought I did approach it on its own terms, I guess I was wrong. I think what is wrong here is a misunderstanding of the word ”society” and what it means.

a) Productivity is definitely an individual characteristic. For ”society” does not actually exist as a distinct entity. Society is all of us people, who are individuals. Society cannot be run or managed to prosperity, it must be left alone, so that each individual can contribute in their own way to everybody else.

b) It is a profound mistake to ascribe the capital with which people use in business enterprises to be something given by ”society”. In free societies, all machinery and equipment are owned by individual people, who are each pursuing their self interest, in harmony with other’s self interests.

That means any and all wealth that is created is not created by ”society”, but rather by individuals.

So I can say that YES, myself personally, I do in fact contribute to the wealth in society. Yes, you are 100% right that I myself did not contribute to the equipment that I utilize, as it was created by previous generations. But this should be something to cherish and celebrate, not feel bad about. It is simply an amazing thing to behold that you and I are able to benefit from that which we have not personally created. That’s the actual beauty of capitalism.

What good is it to say to oneself that our efforts would be meaningless if we were not born here and thus utilize that which we did not create? That is terrible for one’s self esteem. For what is the alternative? That every single person in the world is born into poverty until the rest of time, because they personally did not contribute to the wealth? I think that would be a travesty of highest proportions. We should feel GOOD that the generations before us looked after themselves in a rational way, thus contributing to the future generations indirectly.

Now, as far as misunderstanding the article’s thesis: ”It’s not your money”.

When you say this, it begs the question. For if it is not an American’s money, then WHOSE money does it properly belong to? Keep going with your train of thought and take it to its logical conclusion. A (proper) economist always considers the long term consequences of policy, and if they are really good they will also think of the long term consequences of THOUGHTS.

So? Money is not like rocks. Money is always owned by someone. So if that $43,000 per capita income (average wage) does not belong to the American, then WHO does it belong to? It cannot be nobody. It has to be SOMEBODY. You know, I really did not misunderstand your thesis. I just think you don’t want to admit your own fundamental thesis!

Your fundamental belief is that wealth does not belong to individual people, but rather all the wealth of a country belongs to ”society”. In other words, in your view, people work to produce wealth not for themselves, but for the benefit of ”society”. Do you see where I am going with this? If people work not for themselves but for ”society”, then this can only mean one thing. In order for the people of a country to produce wealth that is beneficial to society over and above themselves, there MUST be a group of people that is tasked with the distribution of wealth to the rest of the population. For not everyone is going to willingly give up whatever money they make. Those people must be forced.

Now, in order for this group to be able to take wealth from people and give it to ”society”, they must be a very strong group, who is willing to use lethal force if necessary, for if the group is ignored as kooks then your policy would be unattainable. The group MUST be willing to use lethal force, which means the group MUST be tyrannical by nature. They must use guns and force for it to work.

Can you see what kind of society I am thinking of here? Can you see how sometimes perfectly good intentions, which are based on faulty economic thinking, can lead to DISASTROUS results?

This is why I cannot EMPHASIZE enough, to learn economics. Having good intentions is simply not good enough in today’s complex world. This is because good intentions are usually (but not always) faith driven at their core. Many religious themes are so ingrained into our thinking we sometimes don’t even know it. One such theme is the notion of EQUALITY. ”We are all equal under the Lord”. Such thinking can lead to really bad results, because the facts contradict the desires. The fact is that we are NOT all equal. Sometimes this inequality comes from our DNA, sometimes our location on the Earth, sometimes from our upbringing, and sometimes from our beliefs. It is simply impossible to have human equality in a world that is so varied and different itself. The Earth itself is so complex, that it would be the end of the human species if we were all forced to be the exact same.

Our different surroundings imply that different actions and thoughts are required in order to deal with those surroundings. To think that people must be equal, and then when observing that we are not, to get angry, and try to force the issue and make everyone equal by force, this is simply an impossible thing to do. The Russian communists tried it. They wanted equality for all. But it simply does not work.

So let me restate my original question:

If the money that Americans make is not theirs, then WHOSE is it? Remember, I already said that ”society” does not exist. If you think that ”everyone” owns the wealth, then you must accept that this society is impossible without the deadly and lethal use of force, which leads to massive death tolls, as I described above.

“this is what libertarians understand but refuse to acknowledge, that there is a foundation that exists which they have not paid for, nor could they possibly pay for, even if they had more wealth then anyone else, the foundation was built over generations with the entire economy contributing”

OK, listen to me very carefully. Libertarians are not your enemy. Please do not make blanket statements you know to be false, like “libertarians believe such and such”. This is collective group think that really undermines ideas and focuses on people rather than ideas. People come and go, but ideas stay forever.

So you cannot make the statement that

“libertarians understand but refuse to acknowledge, that there is a foundation that exists which they have not paid for, nor could they possibly pay for, even if they had more wealth then anyone else, the foundation was built over generations with the entire economy contributing”

Libertarians (at least myself and those I know) ACCEPT this fact you mention about having a foundation that we did not pay for. No libertarians if they are libertarians will deny this.

I suspect that you do not like libertarians for one reason or another, and hence you place them in a corner of allegedly refusing to accept basic truths such as the one you just laid out.

“there are maintenance costs, and if those maintenance costs are not recovered, the foundation collapses and costs MUCH more to rebuild then had it been maintained and modernized”

The “maintenance costs” you are talking about is the continuous reinvestment of revenues in the replacement of business assets. These costs are not a cost borne by society, they are costs borne by individual businessmen who want to continue to make money. Without that drive to continually make money, all businessmen would instead consume everything they make in revenues on such things as booze, cars, houses, and other personal consumption items. The fact that they DON’T, is the foundation for civilization to even continue.

“libertarians also don’t understand the in most cases, regulation were put into place to resolve issues corporations caused and refused to pay for themselves, they wanted everyone else to pay their costs”

They understand how and why people think this, and how and why these people are wrong. It is the COURTS that are the adjudicator of individual conflicts. Regulations that go over and above the protection of individual rights end up HAMPERING the market, they do not improve it.

“for instance, I remember when you flew over new york and California, the air was literally yellow…this was the crap corporations were pouring into my kids air and they refused to clean up after themselves”

Would you believe me is I say that soviet russia was FAR more polluting than the US? Would you also believe me if I say that native American indians in the 16th century wrote about the smog over the area now known as Los Angeles? Pollution due to industry is so minimal it should be as important as 1 ppm of lead in water.

“we had to write legislation that forced them to pay their own bills because they refused, they literally wanted to steal from everyone else, “why should WE pay for the crap we dump in your kids air?””

This is because during the industrial revolution, business and government teamed up and literally availed themselves of any and all pollution. Libertarians know that property rights were violated at that time, and has actually continued to this day.

If property rights were 100% respected in this country, there would be no pollution problem.

“and my education, the profession I have is entirely because other people built the schools I went to and paid the teachers salary and most of their education”

Similarly, the people who are going to be born after you will benefit from that which you contribute to now.

“I would be a very poor man had it not been for the bills that other people paid into our infrastructure and taxes are the method of recovering the expenses I have used getting here”

Taxes did not help you. Individual businessmen managing businesses were the real benefit to you. Want proof? Just look around you, and count how many things are found in a store (in whole like the PC you are using or in part like the bricks of your home). Literally EVERYTHING was made by businessmen who wanted nothing but profit income. Thank them.

OK, listen to me very carefully. Libertarians are not your enemy. Please do not make blanket statements you know to be false, like “libertarians believe such and such”. This is collective group think that really undermines ideas and focuses on people rather than ideas. People come and go, but ideas stay forever.

PERHAPS you didn’t undertand but I am pretty sure you do and just want to think I should listen to you;

when a person is a member of a group who have principles that are the very reason the group is formed, OF COURSE I can and SHOULD make blanket statements

now you can pay close attention to the following as you asked me to pay attention;

libertarians are EVERYONE’S enemy, even libertaritans becuase they have no clue what they are asking for

you NEED to pay your bills, you NEED regulations otherwise whoever can steel from you WILL steel from you

a corporations can NEVER compete with the government for providing the commons, services that everyone needs to survive

now follow after me

libertarians ARE your enemy

are there some people who THIK they are libertarian but they are not?

yes, people and corporations that understand they have bills to pay, taxes and regulations to follow

those types of libertarians are not my enemy, the ones that actually think the market can decide ANYTHING?

they are the country’s enemy, my enemy and your enemy

enjoy the rest of the day

oops, I hit enter before my final thought was entered;

if you don’t want to pay taxes, I think you shouldn’t

and then I want you to pay for everything my parents and grandparents paid for and you used since you don’t want to pay taxes.

then I DON’T want you to ask for welfare because you will not have a penny left to feed yourself and you entire household will owe money for two generations

so be my guest, opt out and then pay for what you haven’t paid for like the water in your house, the electricity lines to your house, the sidewalk you walk, the police, the fire dept, and a host of items you could never ever afford

come back when you pay those bills

“libertarians are EVERYONE’S enemy, even libertaritans becuase they have no clue what they are asking for”

Hmmm…that’s strange to hear you say that.

What libertarians want is an exception to human history. You probably don’t look at history (or else you would have a little more sophisticated view of libertarianism). Almost all of human history has been filled with disease, young death, tyranny, poverty, wars, and in general a very unhappy experience. The one hundred or one hundred and fifty years during the industrial revolution (19th century) was filled with what was perhaps the fastest rise out of poverty ever recorded in human history.

It is very easy to think, feel, and be convinced, that collectivism is the way to go. It’s easy because all you have to do to create collectivism is to think “if there is a problem, there ought to be a law”, and “if someone is hurting, let’s designate Mr X to be there help anyone out”.

This is why collectivism is the almost natural human tendency. I understand where you are coming from, and that you truly believe that it is the taxes you pay that is the reason why we have it so good. But you are incorrect. Nobody spends money better then the owner of that money. The world has already tried what you want and what you think is best. It has failed miserably. Your ideas have ALREADY been put into practice before, so don’t think you are thinking of anything original here.

What libertarians want is not a LAWLESS society. That is the biggest misconception there is. Libertarians want to have laws that prevent all the things you are worried about, such as theft. Where they differ from the mainstream is that libertarians want government to fulfill the functions that the founding founders wanted it to fill. The founders wrote the Constitution as a document that dictated what the state can and cannot do. All libertarians want is for government to follow the Constitution.

If you think that this is a bad thing to do, then you are a walking contradiction, because without libertarians, this country would not exist, and you would probably be living under tyranny. Because without America showing the world how to be free, the world would still be living under theocratic dictatorships. You absolutely 100% take for granted the fact that libertarians are who BUILT this country, so to say anything bad about libertarians is to say bad things about the people who allowed you to be free to say bad things about ANYTHING!!!

If you cannot accept this fundamental truth, I suggest you either get out of the country and move to a place that practices what you are preaching, or else educate yourself, for pete’s sake.

Sigh

What is missing so very often is even an economics 101 understanding of economic terms and processes that make reading the comments a matter of endurance. The most egregious misuse of terms “Rich” (as relates to income derived from economic activity) and “Wealth” (as relates to accumulated unconsumed return on economic activity) illuminate a structural ignorance unsurpassed anywhere else and will provide fertile grounds for the demagogue and propagandist to plant their mischievous seeds of disinformation, discord and destruction. What is so difficult to understand the four economic inputs to the economic process and what the returns to each are: land/rent; Labour/wage; capital/interest; and entrepreneur/profit which simply put would satisfy the statement: Economic process is – the use of resources and labor with tools by someone who puts everything together to create an economic good. Economic goods satisfy economic needs, wants and desires.

By reducing to a basic more universal definition, economic discussion can be cleansed of emotional rhetoric that is the province of the demagogue and propagandist. All too often commentary is that of rage, misdirected, misunderstood, and counterproductive to their desired result let alone an acceptable economic end. Examples of this include but are not limited to: flat tax raters (including “simple” system advocates), gold-bugs (and other mercantilist/monetarist ideologies), confiscatory corporate disenfranchisementalists (as anti-fascism position), and a hodge-podge of malformed political opinions masquerading as economic fact. There is a roaring display of ignorance coming from the product of the American educational system, even through university, how it can be unobserved is astounding, but in the country of the blind, the one-eyed will be king – or dictator.

This is being submitted EPU for Ian’s perusal. Again a stunningly well done post. All the best…..

Government interests (infrastructure) are open ended. You can’t have too many parks, police, educators whatever and that is the problem. Taxing authorities first decide on what the community, state, or federal government wants and then it estimates revenue. The difference, and there always is a difference, is eliminated by a tax increase. For the feds, a class unto itself, the difference is eliminated by borrowing. This is exactly the opposite of how individuals spend their money. They first look to how much they have and allocate it amongst what they want.

Furthermore, expenditure has many friends because it means someone’s livlihood, while conservation or restraint has no friends because no one but the community benefits. So taxes go up and we have Libertarian types rationalizing their reluctance to pay taxes with all sorts of theories when the question is how much do we reasonably render unto Caesar?

SIGH

SIGH

SIGH

SIGH

Whew, now that we all got our SIGHS out of our system…

“What is missing so very often is even an economics 101 understanding of economic terms and processes that make reading the comments a matter of endurance.”

Like this sentence? Just kidding…

“The most egregious misuse of terms “Rich” (as relates to income derived from economic activity) and “Wealth” (as relates to accumulated unconsumed return on economic activity) illuminate a structural ignorance unsurpassed anywhere else and will provide fertile grounds for the demagogue and propagandist to plant their mischievous seeds of disinformation, discord and destruction.”

Wow, talk about endurance!! You could have just said that the misunderstanding of wealth and income leads to bad results. Or even more simply, don’t misunderstand! I didn’t get anything more out of this sentence then that. You know, an over-emphasis of words where fewer would suffice actually detracts from the impact of what you want to say. Just some helpful advice.

“What is so difficult to understand [ARE] the four economic inputs to the economic process and what the returns to each are: land/rent; Labour/wage; capital/interest; and entrepreneur/profit” which simply put would satisfy the statement: Economic process is – the use of resources and labor with tools by someone who puts everything together to create an economic good. Economic goods satisfy economic needs, wants and desires.”

I don’t find that difficult to understand. SIGH….maybe some people do right? SIGH….

“By reducing”

Reducing what exactly?

“to a basic more universal definition”

Universal truths are actually the most difficult to discern. Aristotle thought so because these truths are furthest away from our senses.

“…economic discussion can be cleansed of emotional rhetoric that is the province of the demagogue and propagandist.”

Economics is a philosophy, so you will never “cleanse” it of emotion. What you have to do is determine where and how emotions come into play and then be in the position to explain why they did appear. You will find it is because of a belief in a certain area of economics.

“All too often commentary is that of rage, misdirected, misunderstood, and counterproductive to their desired result let alone an acceptable economic end.”

Then you are looking in the wrong places. There are plenty of places (not on TV or in the newspaper) where the discourse is calm and rational.

“Examples of this include but are not limited to:”

I would hope not, or else the post would go on forever.

“flat tax raters (including “simple” system advocates)”

Bad. Flat taxes hurt the consumer (actually all taxes ultimately are born by the consumer.

“gold-bugs (and other mercantilist/monetarist ideologies)”

Woah, THAT’s a jump from one thing to another. Gold bugs? Gold bugs are opposite to monetarists. Or haven’t you heard of the Chicago School of Economics?

“confiscatory corporate disenfranchisementalists (as anti-fascism position)”

That isn’t even a word dude.

“and a hodge-podge of malformed political opinions masquerading as economic fact.”

[edited by mod]

“There is a roaring display of ignorance coming from the product of the American educational system, even through university, how it can be unobserved is astounding, but in the country of the blind, the one-eyed will be king – or dictator.”

HERE I will agree with you. I guess you do know SOME stuff.

[Mod note: Gratuitous insult removed. Continuing to insult other commenters will result in the entire comment simply being removed. Thank you for your cooperation.]

threw a triple – most FDL regulars would think you were talking baseball, then it would be hit a triple.

Canadian. I knew an Ian Welsh in the Halifax NS area. Was that you?

if one person goes to buy a gallon of milk for $2 why should someone else have to pay $4 for it?

I’m sorry, but a quart of milk in Vermont should be cheaper than a quart of milk in Barrow, AK.

Nope. I’m up Toronto way.