Important Difference between recoveries Great Depression and "Great Recession"...

[Craig234]

Out of curiosity, how does letting the Bush tax cuts expire help the middle class when it will raise their taxes? Heck, how does increasing the taxes on the top .01% raise the wages of the middle class?

Because it will raise the taxes MORE on the rich than the middle class, helping shift the debt burden more to the rich. Same reason the Bush tax cuts hurt the middle class.

 

[xBiffx]

Well then, raise the tax on short-term capital gains and perhaps a smaller increase on long-term capital gains while increasing the time required for capital income to be considered long-term capital gain.

Then allow the Bush tax cuts to expire but let the top rate go up to 35-37% instead of 39%

That's an idea but I am weary that with that you might hinder investment, which at this point could be another deathblow to the economy. It might be worth a try however.

 

[Genx87]

I didn't complain when we bailed out the Auto industry. Not only did it save those particular auto jobs, but also their suppliers and lots of other midwestern jobs that weren't even really connected to the auto industry. And now they're doing fine.

Banks are a fucking exception, what part don't you get.

Again, HISTORY is on my fucking side, virtually every wealthy nation engaged in mercantilism/neo-mercantilism/industrial policy and came out ahead.

You rightwingers can engage in your daydream 'theories' that never seem to pan out, while the rest of us deal with FACT and REALITY.

Why do you support bailing out of the auto industry but not the banks if collateral damage is what you are worried about?

I didnt see your edit from your previous reply. Your example of an ideal economy is the 1800-1940s? This is getting good. On the gold standard and the era of robber barons? 😀

Here is a reality for you. We live within a global economy. Putting a wall up will only protect us for so long.

 

[Ausm]

What do you want raised and how does this reply to my post about his deciding to pick 33-34 vs 30-31?

hmm good question but now that I look back on it, possibly I was referring to your I.Q.

 

[Genx87]

hmm good question but now that I look back on it, possibly I was referring to your I.Q.

It took all night for you to come up with that reply? Dont cast stones in your glass house Ausm.

 

[Darwin333]

Because it will raise the taxes MORE on the rich than the middle class, helping shift the debt burden more to the rich. Same reason the Bush tax cuts hurt the middle class.

So since the rich will be paying more too the middle class will be better off with less money AND we will still be running a very large deficit? I am not following your logic.

 

[werepossum]

So since the rich will be paying more too the middle class will be better off with less money AND we will still be running a very large deficit? I am not following your logic.

Craiglogic - if you punish one group more, everyone else is better off even if you punish them a bit too. It's like those psychological experiments where a group of strangers plays a game for money, then afterwards those who wound up with less are offered a deal: we'll take 75% of the winner's money but only if we also take 25% of yours, or you can all keep what you won. A surprising number of people vote to take the former, willing to have less if the winner is punished even more. Don't expect to follow it.

That said, I can think of a few ways that taxing the rich might fit into Blankslate's scenario. First, we'd have less debt, so we'd have more money to invest into infrastructure and basic research. That posits a political party that raises taxes on the rich and doesn't spend even more, plus it assumes that the hit on business from taxing the job providers is less than the boost from the added infrastructure and basic research. But it's certainly possible, especially if combined with protectionist policies that discouraged offshoring.

Second, we could take the extra money from taxing the rich and directly subsidize American companies, especially those deemed strategically necessary or core industries. That gives us a great problem with all the fair trade treaties we've signed. We could probably force that through (albeit with some very hard feelings and some trade wars) as long as we remain the world's largest and most lucrative market, but our time to do so is limited.

Third, we could take the extra money from taxing the rich and throw it into education. Completely revamp education so that it's effective, greatly cut the student/teacher ratio, make free advanced technical education available, heavily subsidize basic and advanced research. In short, attempt to leverage Americans' ability to create and innovate to a point that our net loss in importing manufactures becomes a net gain from IP.

Fourth, we could take the extra money from taxing the rich and use it to completely offset the corporate tax. Move your manufacturing to America and pay zero corporate income tax as long as the money stays here. That should be a powerful incentive to bring manufacturing back here, especially coupled with a stiff tax on importing foreign manufacturing profit and no tax on importing foreign sales profit from American manufacturing.

I am philosophically a low tax limited government guy at heart, but I can see other ways of ordering society that might work. And simply limiting taxes on high earners isn't in and of itself reason to not move manufacturing off shore, since that way they can earn even more money to be taxed at the lower rates.

 

[Ausm]

It took all night for you to come up with that reply? Dont cast stones in your glass house Ausm.

No not really, I just forgot about this post.

 

[wetech]

Assuming those at the top of the income scale earn most of their income from investments, this isn't a mind blowing revelation, given the stock market's -1.2% return in '34 and +14.8% return in 2010

 

[Craig234]

So since the rich will be paying more too the middle class will be better off with less money AND we will still be running a very large deficit? I am not following your logic.

The distribution of wealth is an issue. If the top 1% have 90%, or 20%, or 60% of all wealth, affects the rest of society in many ways.

A moderate concentration of wealth is best for society; right now we have a high one.

Why do you think the rich especially benefited from theBush tax cuts? Because they got disproportionate cuts. They might save $200,000 a year and you save $100 a year.

As a percentage, they got more than the 99% got. That shifted wealth to them.

Of course, the 'cuts' were all borrowed money - debt added to the public debt owed by the general public, to keep cash mostly in the pockets of the rich.

The borrowed cuts also create pressure to reduce spending that benefits the people.

You can't be arguing so simplistically that you claim the tax money raised is just lost? If it goes to debt reduction that saves us interest costs. For programs, they help people.

As for 'still running a very large deficit' - it'd be a smaller one. Smaler is better.

In the medium term I'd like to reduce that; we reversed the big deficits before Clinton during his presidency.

We reduce the deficit largely with good investing and spending and stimulating growth, not only by slashing and slashing and slashing any spending that helps citizens.

Undoing the Bush if not more tax cuts would be a return towards 'fiscal responsibility' where we actually pay for what we run up bills for, and shift wealth distribution.

How did our country have prosperity from after WWII through LBJ, with all the policies what Republicans hate - higher rates on the rich and business, bug government programs?

During those presidencies new records were set for the middle class doing well - single income families owning homes, free college, (and men on the moon, etc.)

One hint: the financial sector made 10-15% of the economy's profits, without all the parasitical activities dominating the industry.

Those parasitical extractions of money have skyrocketed - and are not much taxed. Reversing those tax cuts would take from the thieves and return wealth to the country.

Not that they're all 'thieves' - but even the productive rich have had way too much wealth shifted to them from the rest of the country.

The right needs to get it through their head that the rich can't take as much as they do if we're not going to keep heading towards a rich and poor society.

If you want to keep the taxes lower on the middle class and instead put those taxes on the top - because the top has taken so much, no problem, but will you?

You have to choose - protect the rich being super rich and let society suffer, or protect the well being of the middle class and make the rich a bit less rich.

We have the answer of the Republican leadership, supported by the rich - but how about the Republican voters? Are they going to keep bending over and handing over wealth?

Save234

 

[Anarchist420]

I don't see why so many people think that high marginal income tax rates reduce inequalities in wealth, the latter of which is fine anyway. The only way to reduce inequalities in wealth are to tax wealth directly and exempt a large portion of wealth. The liberals aren't going to get anywhere in their quest for equality of outcome if they continue to support centralized banking and the income tax.

I should also note that the chart posted by the OP listed changes in income earned (hint: a lot of people were unemployed), not wealth.

 

[Darwin333]

Craiglogic - if you punish one group more, everyone else is better off even if you punish them a bit too. It's like those psychological experiments where a group of strangers plays a game for money, then afterwards those who wound up with less are offered a deal: we'll take 75% of the winner's money but only if we also take 25% of yours, or you can all keep what you won. A surprising number of people vote to take the former, willing to have less if the winner is punished even more. Don't expect to follow it.

That said, I can think of a few ways that taxing the rich might fit into Blankslate's scenario. First, we'd have less debt, so we'd have more money to invest into infrastructure and basic research. That posits a political party that raises taxes on the rich and doesn't spend even more, plus it assumes that the hit on business from taxing the job providers is less than the boost from the added infrastructure and basic research. But it's certainly possible, especially if combined with protectionist policies that discouraged offshoring.

Second, we could take the extra money from taxing the rich and directly subsidize American companies, especially those deemed strategically necessary or core industries. That gives us a great problem with all the fair trade treaties we've signed. We could probably force that through (albeit with some very hard feelings and some trade wars) as long as we remain the world's largest and most lucrative market, but our time to do so is limited.

Third, we could take the extra money from taxing the rich and throw it into education. Completely revamp education so that it's effective, greatly cut the student/teacher ratio, make free advanced technical education available, heavily subsidize basic and advanced research. In short, attempt to leverage Americans' ability to create and innovate to a point that our net loss in importing manufactures becomes a net gain from IP.

Fourth, we could take the extra money from taxing the rich and use it to completely offset the corporate tax. Move your manufacturing to America and pay zero corporate income tax as long as the money stays here. That should be a powerful incentive to bring manufacturing back here, especially coupled with a stiff tax on importing foreign manufacturing profit and no tax on importing foreign sales profit from American manufacturing.

I am philosophically a low tax limited government guy at heart, but I can see other ways of ordering society that might work. And simply limiting taxes on high earners isn't in and of itself reason to not move manufacturing off shore, since that way they can earn even more money to be taxed at the lower rates.

While I definitely agree with some of your prescriptions they don't really fit into the reality of the situation. The reality is that we are already running trillion dollar+ deficits so while I think that we need the additional income I do not agree that it would give us "extra money" to spend.

 

[CycloWizard]

Maybe the solution is to stop relying on the government to distribute money. Period. It gives it to the poor via social programs and to the rich via contracts. The people in the middle are thrown under the bus and pay the bulk of the taxes that go to those poorer and wealthier than they are.

 

[Darwin333]

The distribution of wealth is an issue. If the top 1% have 90%, or 20%, or 60% of all wealth, affects the rest of society in many ways.

A moderate concentration of wealth is best for society; right now we have a high one.

Why do you think the rich especially benefited from theBush tax cuts? Because they got disproportionate cuts. They might save $200,000 a year and you save $100 a year.

As a percentage, they got more than the 99% got. That shifted wealth to them.

Been a long time since I looked at the Bush tax cut numbers but I thought percentage wise the middle class got a bigger cut but absolute dollar wise the upper class got a larger chunk.

And while I understand the issue you are presenting I am not sure that I buy into the idea that if we take a few more percent from the top 1% that the distribution of wealth would change much if at all. That doesn't mean that we shouldn't tap them for some more just that I am not sure that it will affect the above issue. I have done absolutely no research on this so if you have I would appreciate a link or two.

Of course, the 'cuts' were all borrowed money - debt added to the public debt owed by the general public, to keep cash mostly in the pockets of the rich.

Agreed.

The borrowed cuts also create pressure to reduce spending that benefits the people.

Sort of agree.

You can't be arguing so simplistically that you claim the tax money raised is just lost? If it goes to debt reduction that saves us interest costs. For programs, they help people.

I don't recall making that argument at all.

As for 'still running a very large deficit' - it'd be a smaller one. Smaler is better.

While we definitely need to increase revenue to our historic norms I have little faith that it would actually be used to reduce the deficit. That is more on us though to demand that it does.

In the medium term I'd like to reduce that; we reversed the big deficits before Clinton during his presidency.

We reduce the deficit largely with good investing and spending and stimulating growth, not only by slashing and slashing and slashing any spending that helps citizens.

We don't really make very many good investments though with our deficit spending. We make a few but as a percentage of the budget it is trivial. Hell, particle physics used to be OUR field but we decided that the relatively trivial amount of money to keep it our field wasn't worth the investment. The leaders in science are almost always the leaders in innovation and that almost always leads to prosperity. It doesn't seem like we want to do that anymore nor do we seriously want to invest in things like infrastructure or anything lasting.

One hint: the financial sector made 10-15% of the economy's profits, without all the parasitical activities dominating the industry.

Those parasitical extractions of money have skyrocketed - and are not much taxed. Reversing those tax cuts would take from the thieves and return wealth to the country.

I have been banging that drum for a long time, glad to see that a few more people are starting to realize that the financial sector is taking a much larger piece of the economic pie while adding nothing of value.

If you want to keep the taxes lower on the middle class and instead put those taxes on the top - because the top has taken so much, no problem, but will you?

You have to choose - protect the rich being super rich and let society suffer, or protect the well being of the middle class and make the rich a bit less rich.

I have never been about "protecting the rich". I do think they need to pay more in taxes but the numbers don't lie, they can't pay enough for us to spend what we want to spend. That means we must increase everyones taxes if we wish to keep our current spending up.

 

[CADsortaGUY]

Maybe the solution is to stop relying on the government to distribute money. Period. It gives it to the poor via social programs and to the rich via contracts. The people in the middle are thrown under the bus and pay the bulk of the taxes that go to those poorer and wealthier than they are.

but but but clearly that wouldn't work... the gov't needs to be involved for anything to work... duh

 

[Zebo]

It is not a depression. This whole thing is just starting and we have not even hit hyper inflation yet. Wait until people start losing their lives and get shot in the back for a loaf of bread. Then you can call it a depression.

Right now people are still buying bonds so people still get fed and thier SS checks. The Fed is buying around 60% but someday jig will be up and money will be worthless so I wouldnt bank on those ppl keeping anything. They'll be lucky to make it out alive!

 

[Jhhnn]

It is not a depression. This whole thing is just starting and we have not even hit hyper inflation yet. Wait until people start losing their lives and get shot in the back for a loaf of bread. Then you can call it a depression.

Right now people are still buying bonds so people still get fed and thier SS checks. The Fed is buying around 60% but someday jig will be up and money will be worthless so I wouldnt bank on those ppl keeping anything. They'll be lucky to make it out alive!

That's not a depression, Zebo, but rather anarchy brought on by collapse of govt.

Nor are we at risk of hyper inflation in the current eocnomic mess left in the wake of the Ownership Society. Action by the FRB & Treasury has barely avoided deflation. Not that the financial elite are opposed to deflation at all- for them, it's great when their money gains value stuffed into their mattresses- there's no risk at all. For investors, that's essentially what Treasuries are today, actually having negative yield against projected inflation. If the govt quit borrowing & spending, the circulation of money in this country would plummet, resulting in a self reinforcing debt/deflation scenario.

 

[dmcowen674]

Bushes tax cuts should expire and the top tax rate should go back to 39.5%

We should also see if it is possible to get out of the free-trade treaties we are in employ tariffs and other policies that would encourage manufacturing in the U.S.

This and this

 

[CycloWizard]

but but but clearly that wouldn't work... the gov't needs to be involved for anything to work... duh

Exactly. I figured most would avoid my post like the plague. They are not interested in justice or even basic fairness. They are only interested in using the government as a bully to do their bidding.

 

[cybrsage]

Raising taxes when the economy is as fragile as ours is is a stupid idea and one which should be avoided like the plague it is.

 

[shira]

So what is the solution? Pay people an exorbitant amount of money for the work they do/products they produce? Nothing like the left pointing out the problem, yet bringing zero solutions to the table.

Perhaps you should consider actually reading the article:

Government policy can change again and for the better. We can create a growing economy with widely shared prosperity.

We need to increase spending on education and research to maximize returns from human capital. We need to create jobs rebuilding our decaying infrastructure so people and goods move efficiently. We need to honor markets, letting mismanaged banks and insurers receive their just desserts in U.S. Bankruptcy Court.

We need to adjust our focus away from financial sector profits to people. We need to reform taxes to discourage capital withdrawals and offshoring and, instead, encourage reinvestment of profits at home.

Those seem like pretty specific recommendations.

 

[werepossum]

While I definitely agree with some of your prescriptions they don't really fit into the reality of the situation. The reality is that we are already running trillion dollar+ deficits so while I think that we need the additional income I do not agree that it would give us "extra money" to spend.

I too would prefer to see the deficits reduced to zero if not negative.

 

[Jhhnn]

Raising taxes when the economy is as fragile as ours is is a stupid idea and one which should be avoided like the plague it is.

Depends on whose taxes are raised. Raising taxes on extremely high earners would likely have negligible effect other than positive, because their money isn't spent, but rather saved in the current economy. It's not really even invested in productive endeavor in the current economy. Corporate cash reserves are at an all time high, and the incomes of tippy top earners have grown explosively in this so-called "recovery", yet non-financial investment is quite low.

What we're experiencing is basically the artificial scarcity of hoarding, and dishonest calls for austerity for everybody else on the part of the hoarders.

Not to mention that benefit cuts for low earners have the same functional effect on the economy as raising their taxes... and nearly all their money circulates rather quickly in the economy.

 

[CADsortaGUY]

I too would prefer to see the deficits reduced to zero if not negative.

If the deficit was zero, we could grow ourselves out of debt but it's difficult to see such growing ourselves out of debt when we keep deficit spending.

 

[CycloWizard]

Depends on whose taxes are raised. Raising taxes on extremely high earners would likely have negligible effect other than positive, because their money isn't spent, but rather saved in the current economy. It's not really even invested in productive endeavor in the current economy. Corporate cash reserves are at an all time high, and the incomes of tippy top earners have grown explosively in this so-called "recovery", yet non-financial investment is quite low.

What we're experiencing is basically the artificial scarcity of hoarding, and dishonest calls for austerity for everybody else on the part of the hoarders.

Not to mention that benefit cuts for low earners have the same functional effect on the economy as raising their taxes... and nearly all their money circulates rather quickly in the economy.

People should be punished for making money and saving it rather than spending it on hookers and blow? It's dishonest for them to save such money when there is such need to have it pumped back into the economy? This concept of money as a common, rather than personal, resource to be tapped as you see fit is exactly one of the things that government exists to prevent. Our nation is supposed to be one of rights, but you have framed it in terms of mutual responsibilities. This is an increasingly common mindset that flies in the face of the foundation the US was founded on.