A solution to our money problems

[IronWing]

Congress!

I look forward to honest, open, serious deliberation about monetary policy by our elected officials.

 

[fskimospy]

Congress!

I look forward to honest, open, serious deliberation about monetary policy by our elected officials.

Hahaha, what a clown.

The Fed was made independent to stop precisely this sort of ideological and political meddling.

 

[PokerGuy]

Yeah, that sounds like a terrible idea.

No matter how lousy a job the fed does, I can't imagine having idiots in congress or the white house directly dictating such policies would be better.

 

[WHAMPOM]

Congress!

I look forward to honest, open, serious deliberation about monetary policy by our elected officials.

Roll back the last fifty years of tax breaks?

 

[PokerGuy]

Roll back the last fifty years of tax breaks?

Actually, that wouldn't solve anything. Go look at the effective rate of taxation from 50 years ago and compare it to today. The difference is not significant enough to really "fix" anything. Especially if you figure in local/state taxes, permits and all sorts of additional revenues collected. The total level of taxation probably hasn't changed that much.

 

[Fanatical Meat]

and how long would it take before the party in charge cuts interest rates not because its needed but because its needed to give an employment boost to their candidates?
Bad plan to leave this in the hands of people who need to be elected.

 

[lotus503]

Actually, that wouldn't solve anything. Go look at the effective rate of taxation from 50 years ago and compare it to today. The difference is not significant enough to really "fix" anything. Especially if you figure in local/state taxes, permits and all sorts of additional revenues collected. The total level of taxation probably hasn't changed that much.

Its close for median, but for the top %3 they pay much less tax today than they did 50 years ago. and with the existing population the revenue woudl be staggering I suspect.

Look at Minnesota, they raised the tax rate on high earners and are doing very well because of it.

 

[PokerGuy]

Its close for median, but for the top %3 they pay much less tax today than they did 50 years ago. and with the existing population the revenue woudl be staggering I suspect.

Actually, I remember seeing the stats on that. Even if you taxed the top 1% of earners at 100% (ie, just take all their income away), it would not make a dent in our debt -- it would not "fix our money problems".

Look at Minnesota, they raised the tax rate on high earners and are doing very well because of it.

I don't know how you've managed to isolate MN's "doing very well" to specifically that cause while excluding other factors, but if that's what you want to believe, that's fine.

 

[zinfamous]

I truly believe that the latest crop of elected officials learned history and economic policy from the back of a cracker jack box, said to themselves, "My, that'd be a corking affair to get elected to public office and have the occasional opportunity say a bunch of stuff in front of a camera!"

 

[fskimospy]

Actually, I remember seeing the stats on that. Even if you taxed the top 1% of earners at 100% (ie, just take all their income away), it would not make a dent in our debt -- it would not "fix our money problems".

Not true at all. While 100% taxation is a silly idea that would never work, the top 1% collectively make approximately 20% of national income. (depending on the year). US GDP is ~$15 trillion. 20% of that would be about $3 trillion. Not only would that eliminate the deficit overnight, we would pay off the national debt in about 5 years.

 

[piasabird]

The problem is our elected officials don't set monetary policy.

Fed chairman sets policy.

 

[zinfamous]

and how long would it take before the party in charge cuts interest rates not because its needed but because its needed to give an employment boost to their candidates?
Bad plan to leave this in the hands of people who need to be elected.

This is the consistent dumbing down of policy through dumb politics. All you need to do to appeal to the average idiot is remind them that "in a democracy, the people choose!"

Just tell them that if they don't like something, they should be allowed to vote against it. Don't like what that judge said? Then we should be able to vote for judges! Don't like this policy or that policy that is being dictated by appointees, then why not give me that power, see, because I am elected! And I speak for the people!

It's a frightening and dangerous argument that appeals to simple people that can't see the forest for the trees. And it is getting worse. They are essentially saying that the solution to fixing political partisanship and congressional ineptitude is to insure that we further entrench important policy within political tents, where policy is dictated by the ever-changing climate of partisan team sports.

 

[zinfamous]

The problem is our elected officials don't set monetary policy.

No, that is not the problem. That is blind and misguided. See above.

 

[zinfamous]

Actually, I remember seeing the stats on that. Even if you taxed the top 1% of earners at 100% (ie, just take all their income away), it would not make a dent in our debt -- it would not "fix our money problems".

Well, I'm sure that the economy is far more complicated these days, what with globalization and paper currencies and all that, but remember when Carnegie (or was it Morgan?) was like, "Well shit, how about I just pay off the US debt?"

Dude wrote a cheque...no more debt. Weird.

 

[Jhhnn]

Actually, that wouldn't solve anything. Go look at the effective rate of taxation from 50 years ago and compare it to today. The difference is not significant enough to really "fix" anything. Especially if you figure in local/state taxes, permits and all sorts of additional revenues collected. The total level of taxation probably hasn't changed that much.

It'd go a long way towards fixing explosive inequality & restoring balance in our political system.

That's the opposite of what Toomey wants, obviously. When interest rates go up, the true Bush constituency earns more money parking theirs in the safest investment in the world, US govt bonds. They like that, & right wing political operatives like to whine about the interest on the debt at the same time.

 

[PokerGuy]

Not true at all. While 100% taxation is a silly idea that would never work, the top 1% collectively make approximately 20% of national income. (depending on the year). US GDP is ~$15 trillion. 20% of that would be about $3 trillion. Not only would that eliminate the deficit overnight, we would pay off the national debt in about 5 years.

I stand corrected, I must have been looking at numbers around marginal rates and projected revenue increases etc.

On a side note, if total revenues (local, state, federal) are expected to be about $6 trillion for 2014, and GDP is roughly $15 trillion, it's staggering to see that roughly 40% of all income (actually more, since we had a deficit) is used to fund government. Yowser.

 

[PokerGuy]

It'd go a long way towards fixing explosive inequality & restoring balance in our political system.

Social justice warrior alert, lets confiscate wealth and have government redistribute it, hand it to cronies and "contributors". Uh, no thanks.

That's the opposite of what Toomey wants, obviously. When interest rates go up, the true Bush constituency earns more money parking theirs in the safest investment in the world, US govt bonds. They like that, & right wing political operatives like to whine about the interest on the debt at the same time.

Aside from the usual partisan drivel, I've already said I think more congressional control over setting rates and monetary policy is a bad thing. Less politics and more economics driving monetary policy makes more sense, not the opposite. Politicians have their own short term interest a heart (regardless of party), which isn't always going to coincide with the long term economic interest of the country.

 

[zinfamous]

Social justice warrior alert, lets confiscate wealth and have government redistribute it, hand it to cronies and "contributors". Uh, no thanks.



Aside from the usual partisan drivel, I've already said I think more congressional control over setting rates and monetary policy is a bad thing. Less politics and more economics driving monetary policy makes more sense, not the opposite. Politicians have their own short term interest a heart (regardless of party), which isn't always going to coincide with the long term economic interest of the country.

:thumbsup:

 

[TheSlamma]

How are we as middle class getting any benefits from these low interest rates though also?

1: Savings accounts are useless

2: Mortgage rates are low sure, but all it does is cause sellers to raise a $400,000 house to $500,000 since people don't buy houses based on the total cost, they buy houses on what they can squeeze into that 44% income to mortgage ratio.

3: Also you get a piss poor tax write off on that mortgage interest rate.

4: The banks don't pass that savings on in any other small personal loans, they still shake people down on credit cards, signature loans and if you have bad credit then your auto loan will look like a mortgage payment from the early 90's.

IMO everything we think we are saving actually just ends up driving the total cost up on the item anyway and in the long run we are just paying more for the same objects.

Edit: Also just cause I have these feelings about low interest rates isn't me condoning that congress should control them.

 

[Jhhnn]

Social justice warrior alert, lets confiscate wealth and have government redistribute it, hand it to cronies and "contributors". Uh, no thanks.

Dragging out a straw man so early? Be sure to go heavy on the false attribution, OK?

Aside from the usual partisan drivel, I've already said I think more congressional control over setting rates and monetary policy is a bad thing. Less politics and more economics driving monetary policy makes more sense, not the opposite. Politicians have their own short term interest a heart (regardless of party), which isn't always going to coincide with the long term economic interest of the country.

What sort of economics should drive monetary & fiscal policy? Lots to choose from, much of it driven by ideology in the first place. I doubt you'd listen to the people who've actually been getting it right.

 

[Fanatical Meat]

Don't forget Representatives & Senators are able to make financial gain from crap they vote on. Do we want these guys making decisions that can move banks & investment firms stock plus be able to invest in them?

 

[lotus503]

Actually, I remember seeing the stats on that. Even if you taxed the top 1% of earners at 100% (ie, just take all their income away), it would not make a dent in our debt -- it would not "fix our money problems".


Sure it would make a dent it wouldn't be the only required change but it would be a helpful one. First address revenue then address efficient use of that revenue.


I don't know how you've managed to isolate MN's "doing very well" to specifically that cause while excluding other factors, but if that's what you want to believe, that's fine.

https://www.minnpost.com/eric-black...onsin-vs-daytons-minnesota-which-doing-better

 

[PokerGuy]

https://www.minnpost.com/eric-black...onsin-vs-daytons-minnesota-which-doing-better

Ya, an op-ed by a poli-sci guy. Yep, I'm convinced.

 

[fskimospy]

How are we as middle class getting any benefits from these low interest rates though also?

1: Savings accounts are useless

Income from interest has never been a meaningful part of middle class income. They have always been useless.

2: Mortgage rates are low sure, but all it does is cause sellers to raise a $400,000 house to $500,000 since people don't buy houses based on the total cost, they buy houses on what they can squeeze into that 44% income to mortgage ratio.

Who is selling you that house? Probably someone else in the middle class. They got a lot of extra money in their pocket.

3: Also you get a piss poor tax write off on that mortgage interest rate.

Mortgage interest deductions are disproportionately accrued by the wealthy, so if anything lower rates are hurting richer people more. If you care about the middle class we should probably eliminate the mortgage interest deduction entirely.

4: The banks don't pass that savings on in any other small personal loans, they still shake people down on credit cards, signature loans and if you have bad credit then your auto loan will look like a mortgage payment from the early 90's.

Low interest rates have almost no effect on short term debt because it's exactly that: short term. Interest rates matter a lot for mortgages because you pay them off over 30 years. They matter little to credit cards because their balances change much more quickly.

IMO everything we think we are saving actually just ends up driving the total cost up on the item anyway and in the long run we are just paying more for the same objects.

Edit: Also just cause I have these feelings about low interest rates isn't me condoning that congress should control them.

The primary benefit of low interest rates isn't your mortgage or whatever like that, it's the expansion of credit in the market that allows more aggregate economic activity to happen. So while your credit card APR might not be lower, you also might have been laid off without the low rates.

 

[lotus503]

Ya, an op-ed by a poli-sci guy. Yep, I'm convinced.

Thats one of hundreds of articles on the same topic.

The facts are undeniable, the governor has instituted higher tax on top earners, raised minimum wage and by nearly every measure the state economy is doing better and more people are working.

But keep your head in your ideological sand.