How Kansas and California Debunked the GOP's Tax Cuts Argument

[Oldgamer]

Thankfully we live in a country where you can move to a state where the tax structure matches your preference. There's high tax/services blue states like California for those who prefer that, and low tax/services states like Kansas for others liking that instead. Funny how that works.

Yep you can move to a state with a sinking economy, that is certainly your choice..lol

 

[theeedude]

Thankfully we live in a country where you can move to a state where the tax structure matches your preference. There's high tax/services blue states like California for those who prefer that, and low tax/services states like Kansas for others liking that instead. Funny how that works.

You also live in a country where you can vote out idiots who bankrupt your state.

 

[glenn1]

You also live in a country where you can vote out idiots who bankrupt your state.

Or not vote them out in the case of Illinois and some other states and cities.

 

[Spungo]

The only thing I gather from this is that Democrats are good at creating tech bubbles.

Tech bubbles are caused by monetary policy, not government. A more accurate term is malinvestment or capital misallocation. As long as companies are able to take on new debt to pay the interest on old debt, the ponzi scheme can continue.
Using debt to pay debt is why Twitter and Tesla still exist. Here's Twitter's financial summary, yahoo. Profit margin = -93.71%. As soon as interest rates rise, Twitter and Tesla will become worthless.

 

[Matt1970]

Using debt to pay debt is why Twitter and Tesla still exist.

That's also how the US government still exists.

 

[Zaap]

LOL. The left sure does love its fairy tales. Still beating the Kansas/California dead horse I see.

 

[brycejones]

Kansas where we soon look forward to an educational system like Oklahoma and roads like Missouri.

 

[alcoholbob]

And if a high State income tax is the answer to economic growth, surely a state like Texas with no state income tax should be in the shitter and a state like NY with one of the highest state income taxes in the nation should be right up there.

Oh wait. http://en.wikipedia.org/wiki/List_of_U.S._states_by_economic_growth_rate

Texas ranked #2
New York ranked #37

No no no, it's not what the tax rate is, but the act of RAISING the tax rate that causes a boom in the economy. So as long as New York raises its tax rates continuously it'll have a huge economic boom.

/Green.

 

[Matt1970]

No no no, it's not what the tax rate is, but the act of RAISING the tax rate that causes a boom in the economy. So as long as New York raises its tax rates continuously it'll have a huge economic boom.

/Green.

Maybe it's a delayed reaction here in NY.

 

[Spungo]

No no no, it's not what the tax rate is, but the act of RAISING the tax rate that causes a boom in the economy. So as long as New York raises its tax rates continuously it'll have a huge economic boom.

/Green.

Please stop giving them ideas. They're still chasing the idea that inflation creates jobs. If I spend 90% of my income on necessities like food, energy, and housing, that leaves 10% for discretionary spending. If there's 10% inflation, suddenly 99% of my income goes to food, energy, and housing, and only 1% can go to discretionary spending. If such a scenario happened, what would it look like? Probably a lot like modern day America.

Retail Apocalypse

Dead Mall Syndrome

Economy shrank 2.9% in Q1 2014

Most job growth is low paying because Americans are dead broke. How is anyone supposed to buy a new car or start a business when most of their money just goes to skyrocketing food and energy costs?

One might say that left wing policies are a conspiracy to inflict poverty on as many people as possible, but that might be giving too much credit. It seems just as likely that people truly believe their dumb policies will help.

 

[alcoholbob]

There is no inflation, the Bureau of Labor Statistics is lying when it says pork is going up 7% a year and beef is going up 5% a year over the last decade. According to the CPI inflation is only 1.4%.

Only government numbers below 2% inflation are acceptable on Anandtech. Anything above is bogus.

 

[Matt1970]

There is no inflation, the Bureau of Labor Statistics is lying when it says pork is going up 7% a year and beef is going up 5% a year over the last decade. According to the CPI inflation is only 1.4%.

Only government numbers below 2% inflation are acceptable on Anandtech. Anything above is bogus.

Oh absolutely. You just have to ignore all the price tags for things like food, or clothes, or houses, or cars, or concert tickets, or funriture because hey, electronics are cheaper.

 

[alcoholbob]

Oh absolutely. You just have to ignore all the price tags for things like food, or clothes, or houses, or cars, or concert tickets, or funriture because hey, electronics are cheaper.

People are claiming no inflation because so much of what is counted in the CPI are imported products, while basic necessities--which are domestically produced are excluded from cpi calculations. Its fine and dandy as long as the dollar is the reserve currency. You can print money and buy goods without paying for them. But the problem is the same people who are saying theres no inflation put their hands over their ears and sing "lalala" while the BRICS energy alliance grows with the stated intention of reducing dollar reliance and creating a new OPEC.

Their world is going to flip around one day when we can no longer sustain 500 billion a year trade imbalances and have to produce all these goods ourselves. Then no exclusion of items will be able to keep the CPI number low.

 

[Spungo]

Their world is going to flip around one day when we can no longer sustain 500 billion a year trade imbalances and have to produce all these goods ourselves. Then no exclusion of items will be able to keep the CPI number low.

No problem. We'll just hedonically adjust everything until there's no inflation. Old CPI will count the price of a trash can made of galvanized steel that lasts 20 years. New CPI will count the price of a plastic trash can that has broken plastic wheels after 1 year. They both hold garbage, so they're the same. Old CPI would only look at food when counting the price of food. New CPI will also include "food" when counting the price of food, which may or may not contain large amounts of wood pulp. If anything, Americans should be happy that their food contains lots of wood. Wood is one type of fiber, and most people need more fiber in their diets. Old CPI will include things like natural gas and heating oil. Those will be removed from the new CPI because people don't heat their houses in summer. Electricity will be removed from CPI because people don't run air conditioners in winter.

 

[Matt1970]

People are claiming no inflation because so much of what is counted in the CPI are imported products, while basic necessities--which are domestically produced are excluded from cpi calculations. Its fine and dandy as long as the dollar is the reserve currency. You can print money and buy goods without paying for them. But the problem is the same people who are saying theres no inflation put their hands over their ears and sing "lalala" while the BRICS energy alliance grows with the stated intention of reducing dollar reliance and creating a new OPEC.

Their world is going to flip around one day when we can no longer sustain 500 billion a year trade imbalances and have to produce all these goods ourselves. Then no exclusion of items will be able to keep the CPI number low.

It's only $500 Billion because the economy hasn't fully recovered. It was over $700 Billion for the last 4 years before the recession.

 

[Spungo]

It's only $500 Billion because the economy hasn't fully recovered. It was over $700 Billion for the last 4 years before the recession.

The shale boom helped too. Thanks to the wonders of fracking and technology, USA is now the world's #1 producer of oil. Producing several million more barrels per day, every day, for 365 days, has a very large impact on trade balance. The down side of us importing less oil is that China surpassed the US as the #1 purchaser of Saudi oil. I think we all know what happens next. Saudi Arabia will start to sell oil in dollars or yuan, but only after the Chinese and Russians offer them absolute military protection. Then our president, it doesn't matter which party, will go on TV and say Saudi Arabia is developing weapons of mass destruction. Inflation will surge, retarded economists will pretend to not understand why, and the government will try to fight inflation by creating pins.

 

[hal2kilo]

Yep you can move to a state with a sinking economy, that is certainly your choice..lol

What sad is that he doesn't understand that the poor aren't mobile enough to escape the rich person's Shangri-La.

 

[Brainonska511]

What sad is that he doesn't understand that the poor aren't mobile enough to escape the rich person's Shangri-La.

When you live in LaLa land, everyone has perfect mobility and freedom, along with the capital to pick up their stuff, move elsewhere, and easily find another job.

 

[theeedude]

Moderate and predictable inflation is desirable. It encourages savers to spend money before it devalues or to invest it to get a return in excess of inflation, instead of keeping it under the mattress. Both are important for the economy.

 

[Spungo]

Moderate and predictable inflation is desirable. It encourages savers to spend money before it devalues or to invest it to get a return in excess of inflation, instead of keeping it under the mattress. Both are important for the economy.

I won't say you're wrong. All I ask is that you explain why it's more important to spend money than to save money. My dad was a saver, so my parents did very well during the last recession. Their spending was not affected by the recession. Most Americans live on credit, so the entire economy collapsed as soon as there was a credit crunch. Based on that alone, I would say saving is a very important part of a stable economy.

People like me have been expecting a similar disaster to repeat at some point because the country is in the same position as last time. Nobody has any savings. The fed has ensured that nobody wants to save because the interest rates are so low. Now the whole economy runs on debt. Companies are not growing their earnings, so they make stocks go up by borrowing money and using it to buy back shares. Average Americans are broke, so almost all car sales are funded through debt. If that credit slows down just a little, it would cause car sales to fall off a cliff. Telling people to live paycheck to paycheck and have a negative net worth makes the economy extremely unstable.

The "greatest generation" is the one that lived through the depression and fought in WW2. They were young adults with families in the 1950s and 1960s. They had a very high savings rate, and we look back at that period as being America's golden age. We were the world's largest creditors at that time. We were the world's manufacturing base at that time. Now we are the deadbeats of the world, and our economy is contracting.
I'm Jewish, so I always like mentioning this. Why do people hate Jews so much? Why are there so many conspiracy theories about Jews? It's because we're extremely powerful for our size. We (not me personally) dominate banking, we dominate the media, we dominate comedy, we dominate politics, etc, but why do we dominate those things? It's because we own them. We're savers. We have a culture of saving money and investing it rather than spending it, and this makes us very powerful. The same is true on a national level. As the world's largest creditor, America could dictate how the world operates. We're losing that power because we're not the rich guy with the cigar anymore. We're the guy standing in line at the payday loan store on a Friday because we're desperate for cash.

I think candidate Obama said it best - the national debt is unpatriotic and a threat to national security. Money is power. Being flat broke as a nation is why we're not as powerful as we once were. China could basically crash our entire economy any time they want just by dumping all of their US dollars at one time. It would hurt China as well, but it would absolutely destroy us. We should never give other countries that kind of power. That power is entirely caused by us running deficits every year and China being the buyer of that debt. If we were a nation of savers, the tables would be turned, and we would be the ones capable of financially destroying China.

 

[Matt1970]

I won't say you're wrong. All I ask is that you explain why it's more important to spend money than to save money. My dad was a saver, so my parents did very well during the last recession. Their spending was not affected by the recession. Most Americans live on credit, so the entire economy collapsed as soon as there was a credit crunch. Based on that alone, I would say saving is a very important part of a stable economy.

People like me have been expecting a similar disaster to repeat at some point because the country is in the same position as last time. Nobody has any savings. The fed has ensured that nobody wants to save because the interest rates are so low. Now the whole economy runs on debt. Companies are not growing their earnings, so they make stocks go up by borrowing money and using it to buy back shares. Average Americans are broke, so almost all car sales are funded through debt. If that credit slows down just a little, it would cause car sales to fall off a cliff. Telling people to live paycheck to paycheck and have a negative net worth makes the economy extremely unstable.

The "greatest generation" is the one that lived through the depression and fought in WW2. They were young adults with families in the 1950s and 1960s. They had a very high savings rate, and we look back at that period as being America's golden age. We were the world's largest creditors at that time. We were the world's manufacturing base at that time. Now we are the deadbeats of the world, and our economy is contracting.
I'm Jewish, so I always like mentioning this. Why do people hate Jews so much? Why are there so many conspiracy theories about Jews? It's because we're extremely powerful for our size. We (not me personally) dominate banking, we dominate the media, we dominate comedy, we dominate politics, etc, but why do we dominate those things? It's because we own them. We're savers. We have a culture of saving money and investing it rather than spending it, and this makes us very powerful. The same is true on a national level. As the world's largest creditor, America could dictate how the world operates. We're losing that power because we're not the rich guy with the cigar anymore. We're the guy standing in line at the payday loan store on a Friday because we're desperate for cash.

I think candidate Obama said it best - the national debt is unpatriotic and a threat to national security. Money is power. Being flat broke as a nation is why we're not as powerful as we once were. China could basically crash our entire economy any time they want just by dumping all of their US dollars at one time. It would hurt China as well, but it would absolutely destroy us. We should never give other countries that kind of power. That power is entirely caused by us running deficits every year and China being the buyer of that debt. If we were a nation of savers, the tables would be turned, and we would be the ones capable of financially destroying China.

If more people had savings recessions would be near as bad as people wouldn't be so quick to put on the breaks to their normal spending routine. I like how you said "candidate" said it best - the national debt is unpatriotic, as "President" Obama thought a mere 2% cut in the budget was the end of the world.

 

[alcoholbob]

Moderate and predictable inflation is desirable. It encourages savers to spend money before it devalues or to invest it to get a return in excess of inflation, instead of keeping it under the mattress. Both are important for the economy.

How many people keep money under the mattress?

 

[Cozarkian]

How many people keep money under the mattress?

Not enough.

Think about it. We pay premiums for health insurance to pay for medical emergencies, but we don't have insurance for many life emergencies, such as losing your job or unexpected car maintenance. Since inflation is the cost of holding onto money, setting aside an emergency fund is almost like buying emergency insurance where the premium is the cost of inflation.

Ideally, of course, this emergency fund would be in liquid assets, like a certificate of deposit or savings account, rather than under a mattress. But if the poor want to use a cookie jar rainy day fund instead of a bank account, it's better than nothing.

Too much in an emergency fund is bad, but not having one at all is far worse.

 

[Exophase]

Using debt to pay debt is why Twitter and Tesla still exist. Here's Twitter's financial summary, yahoo. Profit margin = -93.71%. As soon as interest rates rise, Twitter and Tesla will become worthless.

People were saying something similar about Google 10 years ago, ie http://www.theguardian.com/technology/2005/jun/10/city.newmedia and articles like this were common.

 

[Spungo]

People were saying something similar about Google 10 years ago, ie http://www.theguardian.com/technology/2005/jun/10/city.newmedia and articles like this were common.

Except Google and Yahoo actually have cash flow. Tesla isn't a bad company; it's overpriced, but the business is almost profitable. Twitter is just plain terrible. No income, nothing. The company is not even close to making money.
I synthetically shorted Tesla by buying put options when they announced a "gigafactory" because I thought it sounded like someone ringing a bell at the top of the bubble. I did quite well on that trade :biggrin: