Serfdom and Trickle down Economics -difference?

[Jhhnn]

Basically all those things (or equivalents) are what are bringing Europe and US economies to their knees today - it just took time.

Hogwash. What's bringing us to our knees is the transfer of income and wealth to the tippy-top of the heap because Reaganomics displaced the New Deal almost entirely, ruthlessly exploited what was left, covered the results with deficits and cheap foreign goods.

 

[Zebo]

They are not cheap you pay the same that's what none understands. However, You pay twice now, once putting food on Chinese tables and two, for social welfare for people to sit at home unemployed. One can even say 3x if you include degraded job skills while sitting at home. And 4x with national security concerns.

See sig in that case: Cheap is more expensive.

 

[GaiaHunter]

Nah we'll nationalize debt and even take assets before we pay it. Been done 100x before.

That will hurt China.

But will hurt US much more, especially the citizens.

China lending money/buying treasuries is different from Fed printing to buy treasuries - the former create inflation overseas the latter create inflation internally.

It is a question for how long will the rest of the world be stupid.

Unfortunately for US the world being stupid will just postpone the problems (and make it bigger).

US (and all other countries that have huge trade deficits and budget deficits) will need to stop getting in debt to spend in consumption and produce more instead - which was what US did in the 19th century to the beginning of the 20th century - borrowed to invest in industry, then sold part of what it produced and was able to repay the principal, the interest and make money. And for a long time US was able to do that, selling their products cheaper, with higher quality while paying the highest wages in the world.

 

[JohnOfSheffield]

That will hurt China.

But will hurt US much more, especially the citizens.

China lending money/buying treasuries is different from Fed printing to buy treasuries - the former create inflation overseas the latter create inflation internally.

It is a question for how long will the rest of the world be stupid.

Unfortunately for US the world being stupid will just postpone the problems (and make it bigger).

US (and all other countries that have huge trade deficits and budget deficits) will need to stop getting in debt to spend in consumption and produce more instead - which was what US did in the 19th century to the beginning of the 20th century - borrowed to invest in industry, then sold part of what it produced and was able to repay the principal, the interest and make money. And for a long time US was able to do that, selling their products cheaper, with higher quality while paying the highest wages in the world.

Yeah, the US CANNOT do that if they don't want to become a third world tier nation like the Soviets were in the 80's. The inflation will be rampant and currency speculation will make it ten times worse (devaluing the money to a point where you'll need a wheelbarrow to lug it around to buy a loaf of bread), you'll have to start having interest rates near or above 100% just to protect currency alone.

That isn't a good idea and most people get that, some people don't get anything, thy are just "yeeeeeeehaw the south shall rise again" and done with thinking all together after that thought.

 

[GaiaHunter]

Hogwash. What's bringing us to our knees is the transfer of income and wealth to the tippy-top of the heap because Reaganomics displaced the New Deal almost entirely, ruthlessly exploited what was left, covered the results with deficits and cheap foreign goods.

Exactly. What you fail to see though, is the tippy-top is the government.

The government is the one to get more and more and the ones losing it is the middle class.

If you stripped all the rich people out of their money (and a large fraction of their money is in stocks and other assets you would need to convert to money first) it wouldn't be enough.

 

[Acanthus]

Do you believe in the government ability to regulate stuff?

Look at Fannie Mae and Freddy Mac! The government can't even regulate itself!

It is just going to be another of public workers paid by tax payer money that will create more regulations that will be impossible for small business/banks to cope with while the big companies/banks can, making them even bigger.

Do you know who the person is that is building the agency?

If Obama is ballsy enough to put her in as the head as well, I have 100% confidence that the people will have someone on their side for once.

 

[GaiaHunter]

Do you know who the person is that is building the agency?

If Obama is ballsy enough to put her in as the head as well, I have 100% confidence that the people will have someone on their side for once.

But on the other hand Obama govt (and I'm not saying Bush was better - he also ran a gigantic deficit) has a gigantic deficit and a Fed (call it independent if you want but from my POV does whatever the politics wish) that supports that deficit by printing money, making the people money less valuable/having less purchasing power.

Sorry but that speech by Obama saying the reason the 13 colonies rebelled because they were being oppressed (read taxed) by the England with no representation doesn't sound very for "the people".

Oppression (read taxed) with no representation - bad. Oppression (read taxed) with representation (read ability to vote on the oppressor) - good. 🙄

 

[Jhhnn]

Exactly. What you fail to see though, is the tippy-top is the government.

The government is the one to get more and more and the ones losing it is the middle class.

If you stripped all the rich people out of their money (and a large fraction of their money is in stocks and other assets you would need to convert to money first) it wouldn't be enough.

More like owns the govt, ~$14T worth of owned, money that should have been collected as taxes rather than borrowed.

Ronnie Rayguns kicked it off, cut taxes at the top, raised taxes on the middle class, and tripled the national debt.

Wait-- I thought he hated the debt? Not as much as he loved making suckers out of the middle class, substituting borrowing for taxing the wealthy. GHWB and GWB followed through magnificently, simultaneously shifting income enormously to the top tax filers while indenturing the govt even further.

Extending credit at every level other than their own is a substitute for earnings and cover for income shifting to the top and offshore.

Hell, the govt has to put $400B into circulation this year just to maintain the same domestic liquidity, covering the balance of trade deficit... America's wealthiest get a cut off the top of every dollar going offshore, and bring their Chinese and Japanese cronies into the game offering them US govt securities, too...

After being ripped off in the real estate bust, foreign investors aren't interested in sending dollars back to the US w/o govt guarantees...

That recirculation is the only thing holding up the value of the dollar and the profits of offshoring capitalists. Like the big banks, the US is too big to fail, holding the world economy hostage to the greed of our own capitalists... That can't last forever, and when it falls down, we'll suddenly find out just how broke and deep in debt our sorry asses have become pursuing the sham of trickledown economics.

 

[Zebo]

More like owns the govt, ~$14T worth of owned, money that should have been collected as taxes rather than borrowed.

Ronnie Rayguns kicked it off, cut taxes at the top, raised taxes on the middle class, and tripled the national debt.

Wait-- I thought he hated the debt? Not as much as he loved making suckers out of the middle class, substituting borrowing for taxing the wealthy. GHWB and GWB followed through magnificently, simultaneously shifting income enormously to the top tax filers while indenturing the govt even further.

Extending credit at every level other than their own is a substitute for earnings and cover for income shifting to the top and offshore.

Hell, the govt has to put $400B into circulation this year just to maintain the same domestic liquidity, covering the balance of trade deficit... America's wealthiest get a cut off the top of every dollar going offshore, and bring their Chinese and Japanese cronies into the game offering them US govt securities, too...

After being ripped off in the real estate bust, foreign investors aren't interested in sending dollars back to the US w/o govt guarantees...

That recirculation is the only thing holding up the value of the dollar and the profits of offshoring capitalists. Like the big banks, the US is too big to fail, holding the world economy hostage to the greed of our own capitalists... That can't last forever, and when it falls down, we'll suddenly find out just how broke and deep in debt our sorry asses have become pursuing the sham of trickledown economics.

This.

Here is your "growth"
http://2.bp.blogspot.com/_vQft8rEk-.../s1600-h/karl+denninger+debt+1980+present.png

And let me assure y'all when people catch on they will not pay the bond holders while they are starving. Thank goodness we have the muscle and natural resources to say FU.

 

[GaiaHunter]

Hell, the govt has to put $400B into circulation this year just to maintain the same domestic liquidity, covering the balance of trade deficit... America's wealthiest get a cut off the top of every dollar going offshore, and bring their Chinese and Japanese cronies into the game offering them US govt securities, too...

After being ripped off in the real estate bust, foreign investors aren't interested in sending dollars back to the US w/o govt guarantees...

That recirculation is the only thing holding up the value of the dollar and the profits of offshoring capitalists. Like the big banks, the US is too big to fail, holding the world economy hostage to the greed of our own capitalists... That can't last forever, and when it falls down, we'll suddenly find out just how broke and deep in debt our sorry asses have become pursuing the sham of trickledown economics.

You understand that if all that money came back into the US the inflation would be massive and the dollar value would collapse, right?

You understand that without that printed money, it would be impossible for the US government to pay for the US programs like social security, medicare, etc, and if that money didn't went overseas it would create a massive inflation in the US?

You understand that all the printed money plus the money from overseas was what created the real estate bubble in the first place?

You understand that government is also a form of trickle down, taking away from the tax payers and giving it to the non-tax payers (and losing some in between making someone rich without doing anything worthwhile for society )?

You understand that the money people keep (read wasn't taxed) was earned by them legally (if it was illegally the government has the power and duty to act against it and if it isn't then it is failing its duties), despite of them being higher class, mid class or lower class, and so the government isn't actually giving anything to anyone by letting them keep their money.

You understand that is the money people save (and the only people that can save are the ones that have money left after buying the essentials, ie, rich and some middle class) that can be invested and create profitable jobs that create more liquid tax payers, but since governments like to interfere with market "giving guarantees" (read if the investment pays you get the profit, if not the tax payer pays) for stuff like mortgages, that money is wasted on consumption and not wealth creation (read products/goods) that would increase the standards of living?

 

[Jhhnn]

You understand that government is also a form of trickle down, taking away from the tax payers and giving it to the non-tax payers (and losing some in between making someone rich without doing anything worthwhile for society )?

Most of what the govt spends is collected in payroll taxes, not income taxes as in the years pre-Reagan. The rest is borrowed, not taxed, from the world's wealthiest citizens, and America's wealthiest have seen their share of national income more than double in the last 30 years because of those policies and because of offshoring.

Don't start off on the usual anti-tax rant, because the adoption of that idiotic POV and adulation of wealth is what's wrong with this country. They're robbing you blind, and you love 'em all the while.

 

[GaiaHunter]

Most of what the govt spends is collected in payroll taxes, not income taxes as in the years pre-Reagan. The rest is borrowed, not taxed, from the world's wealthiest citizens, and America's wealthiest have seen their share of national income more than double in the last 30 years because of those policies and because of offshoring.

Don't start off on the usual anti-tax rant, because the adoption of that idiotic POV and adulation of wealth is what's wrong with this country. They're robbing you blind, and you love 'em all the while.

Of course most of what the government spends is collected from payroll taxes.

The government spends more and more and keeps getting that from payroll taxes, that means the people that works.

That is exactly why the richer are richer - the government robs the ones that can't fight back. And keep squeezing and squeezing which means you get more and more poor.

The rich will just go away, stop buying treasuries, etc. Of course they are also richer because they own assets that keep rising in value due to inflation created by the Government/Fed.

The question is on what is the government spending so much money and what for?

Clearly they aren't making the poorer any richer otherwise the gap between poor and rich wouldn'thave increased (of course all the rich people are evil, so maybe we need to keep the poor poor to save them from being evil).

C'mon government start to shrink and let the people that work keep their money. They will spend it/invest it wiser than you, that keeps using tax money to bail out companies that are inefficient.

Let the private guy go their way instead of cutting their wages to pay for programs that are unsustainable and stop destroying peoples small savings by creating more and more dollars so you can spend it god knows how.

I'm always marvelled by the people that are anti-rich that made their money by building companies and creating jobs but somehow believe that the wealthy that are in the government (many that got rich gods know how and the others by creating companies) will somehow be from a different breed and will protect the common folks and so want to give them (politicians) more money.

30 years ago the government was smaller and had less powers -> the gap between poor and rich was smaller.

30 years later the government as never been as big and never had so much power-> the gap between the rich and poor increased.

Obviously the logical conclusion is the government isn't big enough and hasn't enough power!!!! :hmm: Sigh!

 

[rudder]

Wondering since some people here still think trickle down economics are relevant somehow still to them as a economic theory, what is the difference between the elite rich "job creators" -the landlords of the feudal age taking the lions share and the serfs waiting for a handout here and there? I am curious how there is a difference to people 2010.

wow... but I will bite. The serfs in the feudal age had zero opportunity to own land or improve conditions. In 2010, I am free to educate myself, work hard, and be successful. Or I can live off the government tit. My choice.

Is it really that difficult?

 

[Jhhnn]

Nobody has grown the govt more than Republicans, Gaia, even as they raved on about wanting smaller govt. Govt grew at the greatest rate since the Great Society under GWB's guidance. It's cover for the failure of Reaganomics to deliver as promised. As private sector jobs have been offshored, govt jobs have been provided in their stead, and the money to pay for them has been borrowed from america's wealthiest rather than collected as taxes. As income from private sector jobs has fallen behind the real cost of living, subsidies have been provided in the form of EITC, etc, and, again, paid for with money borrowed from the wealthiest among us.

You confuse cause and effect. Growth of govt conceals the changes in income distribution and economic power rather than promoting it at all. If it weren't for deficit spending and big govt, Reaganomics would have been rejected long ago, because the negative effects would have been obvious. Trickle-down is a lie- trickle-up is really what's been happening.

Rank and file Righties have been conditioned to not see that, to bite and vote on peripheral emotional issues, to ignore the elephant in the room. And they're quick to accept the false attributions of their leaders wrt the effect of top tier taxes on growth. The faux prosperity of the middle Bush years had little to do with taxcuts, and everything to do with the housing bubble and deficit spending.

 

[GaiaHunter]

Nobody has grown the govt more than Republicans, Gaia, even as they raved on about wanting smaller govt. Govt grew at the greatest rate since the Great Society under GWB's guidance. It's cover for the failure of Reaganomics to deliver as promised. As private sector jobs have been offshored, govt jobs have been provided in their stead, and the money to pay for them has been borrowed from america's wealthiest rather than collected as taxes. As income from private sector jobs has fallen behind the real cost of living, subsidies have been provided in the form of EITC, etc, and, again, paid for with money borrowed from the wealthiest among us.

You confuse cause and effect. Growth of govt conceals the changes in income distribution and economic power rather than promoting it at all. If it weren't for deficit spending and big govt, Reaganomics would have been rejected long ago, because the negative effects would have been obvious. Trickle-down is a lie- trickle-up is really what's been happening.

Rank and file Righties have been conditioned to not see that, to bite and vote on peripheral emotional issues, to ignore the elephant in the room. And they're quick to accept the false attributions of their leaders wrt the effect of top tier taxes on growth. The faux prosperity of the middle Bush years had little to do with taxcuts, and everything to do with the housing bubble and deficit spending.

And do you think I'm saying GWB did a good job?

No. He did a lousy job.

Obama is simply doing more of the same recipe - grow government, bigger budget deficit print more money, trying to re-inflate the house bubble.

It is a recipe that doesn't work either for the republicans or democrats.

I'm all for a smaller government, regardless of being red or blue - they all (maybe not some on both areas) have good intentions but in the end it doesn't work.

Let the government focus on their main functions - external security (without going on stupid wars that bring nothing), internal security and making sure the laws are being applied and that no one is exploiting anyone. Do that and leave the value of dollar alone and the society will work out the bad weed/bad investments/bad business practices and relocate resources to where it is needed instead of where some guy in Washington with no real connection to the world thinks it is best (hint: they know nothing or next to nothing about it).

 

[IndyColtsFan]

Only a name change, instead of King in the Feudal ages they call themselves Conservative Republicans

Don't worry, no matter who is King, you'll always be the court jester.

 

[sandorski]

Exactly. What you fail to see though, is the tippy-top is the government.

The government is the one to get more and more and the ones losing it is the middle class.

If you stripped all the rich people out of their money (and a large fraction of their money is in stocks and other assets you would need to convert to money first) it wouldn't be enough.

Fail.

 

[nonlnear]

Don't worry, no matter who is King, you'll always be the court jester.

I think you're confusing court jester with village idiot. The court jester often wielded significant influence.

 

[IndyColtsFan]

I think you're confusing court jester with village idiot. The court jester often wielded significant influence.

LOL, :thumbsup:. Certainly describes Dave, doesn't it?

 

[Acanthus]

But on the other hand Obama govt (and I'm not saying Bush was better - he also ran a gigantic deficit) has a gigantic deficit and a Fed (call it independent if you want but from my POV does whatever the politics wish) that supports that deficit by printing money, making the people money less valuable/having less purchasing power.

Sorry but that speech by Obama saying the reason the 13 colonies rebelled because they were being oppressed (read taxed) by the England with no representation doesn't sound very for "the people".

Oppression (read taxed) with no representation - bad. Oppression (read taxed) with representation (read ability to vote on the oppressor) - good. 🙄

There has been no out of the ordinary inflation. What you say is wholly false.

 

[GaiaHunter]

There has been no out of the ordinary inflation. What you say is wholly false.

If you actually believe the core CPI - which only leaves food and energy out of the equation. 🙄

And that is with house price crashing... Which was curious because when the house price was rising like crazy inflation wasn't out of ordinary either.

Actually it is curious that during a recession, with people consuming less prices aren't going down.

Additionally I'm talking what about its today called monetary inflation, which a few years ago was indeed the designation of inflation and not about price rising, which is simply a symptom of inflation.

But don't worry - just look at stocks - that is indeed price rising.

 

[Acanthus]

If you actually believe the core CPI - which only leaves food and energy out of the equation. 🙄

And that is with house price crashing... Which was curious because when the house price was rising like crazy inflation wasn't out of ordinary either.

Actually it is curious that during a recession, with people consuming less prices aren't going down.

Additionally I'm talking what about its today called monetary inflation, which a few years ago was indeed the designation of inflation and not about price rising, which is simply a symptom of inflation.

But don't worry - just look at stocks - that is indeed price rising.

You do not understand basic economics. We are currently fighting deflation not inflation.

The overall health of wall street stocks doesn't really indicate either way. After all in an inflationary situation the last thing you would want is cash. Commodities is the way to go with inflation. I'm just waiting for that bubble to burst.

There is heavy inflation in certain markets that still needs to blow up in peoples faces. Namely education and healthcare.

 

[GaiaHunter]

You do not understand basic economics. We are currently fighting deflation not inflation.

Why do you want to fight deflation? Especially house prices crashing?

What is the point?

Houses are overpriced. There are too many of them and many of them are empty!

They need to go down in price so the average american can buy them. Houses aren't an investment to make money - houses serve a purpose which is to have a place to live in.

People need to start saving money because they are already broke. But low interest rates plus inflation simply kills people savings.

And lets not forget unemployment.

The overall health of wall street stocks doesn't really indicate either way. After all in an inflationary situation the last thing you would want is cash. Commodities is the way to go with inflation. I'm just waiting for that bubble to burst.

Stocks go up everytime the Fed drops money into the economy because the US dollar goes down in value due to monetary expansion - typical case of inflation.

Commodities, especially coinage metals, go up even higher. Price of gold going up means inflation and currency debasement. And it isn't a bubble.

There is heavy inflation in certain markets that still needs to blow up in peoples faces. Namely education and healthcare.

So you start by saying there is no inflation and that we are fighting deflation. Then you say certain markets are heavy inflated.

Do you think Obamacare will reduce healthcare prices? Nope. Up and up.

The problem is that the Fed printing money and more money so the government can spend more wont fight deflation at all.

Look at the last statements of the Fed - the Fed new policy is to create inflation!

In their minds they think if prices of stuff goes up, the cost of labour goes down in comparison. They forget that wages are only a fraction of the cost of production.

 

[Jhhnn]

If you actually believe the core CPI - which only leaves food and energy out of the equation. 🙄

And that is with house price crashing... Which was curious because when the house price was rising like crazy inflation wasn't out of ordinary either.

Actually it is curious that during a recession, with people consuming less prices aren't going down.

Additionally I'm talking what about its today called monetary inflation, which a few years ago was indeed the designation of inflation and not about price rising, which is simply a symptom of inflation.

But don't worry - just look at stocks - that is indeed price rising.

Core CPI is based on false values, rent equivalents, which recently have no correlation whatsoever to housing prices, particularly not in the Ownership Society.

http://seekingalpha.com/article/45720-how-owner-s-equivalent-rent-duped-the-fed

I post the article for the chart- the Fed wasn't duped, they're the leaders of the lootocracy.

And if you want smaller govt, you'll need to figure out a way to change back the distribution of income to the way it was before big govt. Big govt won't go away until it tries to take as much in taxes as it currently borrows from the rich. As it is, it's entirely too sweet a deal for them to do away with it.

 

[ShawnD1]

Here is another, maybe the op will not generate discussion for a bit.

Riddle me this Capitalist defenders:

Most of the world is capitalist. Most of the world is poor. Why is it the more mixed market a country is usually the considerably higher standard of living? Why is Somalia a unregulated paradise but a total dump? But most modern first world mixed economies have almost no homeless and people are pretty well off, explain this please. (without racism for a extra 10 points)

I won't say the US is fucked due to black people since that's obviously racist. Let's just say Sweden is doing ok because it doesn't have as many black people 😉

Please also explain how when America was at it's strongest in the 50-60s the richest were taxed up to 90% with plenty of jobs and workers got paid well. Even if only one person was working in the household you could build up a decent living?

That was only true if you had a good job. That's still true today actually. My family was raised on 1 income; my dad was basically an engineer's assistant. One of my friends was raised on 1 income; his dad is a heavy duty mechanic who works on tractor trailers. Another friend had a dad who worked on an oil rig to support the family.
You can still do those jobs if you want. Grunts working on oil rigs get about $30/hour plus benefits around here, and they often do ridiculous schedules like 6 x 12 hour days then 4 days off. The overtime is unbelievable.

The reason people today think all the good jobs were in the past is because modern men are pussies. In the 50s and 60s you were expected to work in a factory or on an oil rig. That was the standard. You get your oil rig job, you find a wife, there ya go. Right now, everyone wants to work an indoor job pushing papers and still make as much money as a factory or oil rig job. Sorry, but you won't get that unless you're a doctor or an engineer or some other highly skilled professional.