The solution to our problems...Tax the rich?

How much does it cost to keep a person on state handouts without recieving anything in return? ok so you pay them slightly more for a 6 or 8 hour day but then you take tax from them, they spend the extra income they get this in turn creates more demand from other quarters of the economy and the economy grows, it might be slow but it would grow. And your roads etc improve your employment figures improve, your tax revenue improves, your GDP improves How many private companies do you see out there repairing roads etc that are not financed from one or anthore area of goverment be it local or national?

 

New debt ceiling deal (8/2/2011)
　
The debt ceiling negotiation reveals one truth, that this nation is controlled by a covert dictatorship which represents the interest of a rich people group, and the so said law makers don't represent the voters any more.
　
1. The tax cut law was proposed and carried out by former present Bush. It is proved being a failed policy. In Bush's eight years term, the national debt raised from 6 trillian to 12 trillian. His tax cut law contributes big in debt increasing. Yet, when Obama wanted to recover the tax rate on rich people, the law makers resisted. It proves they are now working for a little group of rich people not for the majority of Americans.
　
2. War in Iraq and in Afghanistan is another factor to the deficit of the budget. US military expense and war expense add together almost equal to the total expense of all other countries in this world. That's an extra heavy burden of the American tax payers. The strange thing is nobody dares to speak out. No media, no politician dares to finger at it. It's another proof the US has become a covert dictatorship. In it media and politicians all are controlled by the Inside group. They no longer are the voice of people.
　
3. The victim of the new balance deal will be the American people. More people will lose their jobs and welfare aid in new budget. They will have less money to spend. How could economy recover in this foundation? The economy of US will continue remain in stagnation if not going worse.
　
4. The result of today's situation is people can't elect their own representatives. The government insiders have controlled the intelligence and the media. They select politicians of their own through rigged election. (because they control the intelligence) They justify the election result through the fake poll of the media.

 

Well...we just keep feeding the wealthy more and more tax advantages of course. The when the majority of society has collapsed, the elite will have a super big cheap labor pool to rebuild them, while they review their portfolios. Corporations blow. CEO's suck. Corporate management blows. Did I mention that?

 

Sounds like 'Trickle-Down Economics'... aka 'Beat-Down the Poor & Go on Vacation with the Profits and Laaaaaugh' ...isn't your favorite policy. But why? ....everyone loves it, 'cause that bad actor turned loopy president initiated the policy, and so many people can't be wrong, right? "Give the rich all the money and everything will be ok"-kind-of-policy MUST be right 'cause Ronnie said so!

 

So you mock "trickle down", please explain how the alternative of "trickle up" would work?

 

It is obvious why trickle down won't work this time. Businesses have the cash but won't spend it because they don't have the consumers. And personally, I don't think 'Trickle Up' (which is really just more stimulus) will work either. The potential consumers aren't going to go out and spend (leading to more production) because consumer confidence is rock bottom. They are going to pay off debt and save. The gravy train is over. Austerity is coming. Voluntarily or not. Our dear leaders can spread the pain out over a few years if they act this time. Or they can keep their heads in the sand, march in lock step with their party lines to placate the bases for a while longer until it comes all at once.

 

I've stated it once before on this site, but I can restate it: "Trickle up" is the principle that our economy is based on supply and demand. In order for a product to be sold, the buyer must be able to purchase it.

An example of "trickle-up" may be 'the Stimulus Bill'... where, by providing funds for infrastructure improvements, you are putting money into worker's (consumer's) hands, who are then able to buy the products that companies make, which allows companies to grow and hire more workers, etc.

The 'Stimulus Bill' may be contentious, but I believe it has helped the economy by giving consumers more purchasing power. IMO, "Tricle-up' economics works far greater, and far faster, than 'trickle-down' econimics.... (where big business is given the same amount of capital) ...since 'big business' tends to hoard money, and the average consumer tends to spend it.

 

Businesses are hoarding money now because of a lack of confidence in what the (near) future has in store for them; historically that hasn't been the case.
This is a subject where you find the left talking out of both sides of their mouth. On one hand they claim greedy businesses won't use tax reductions & looser regulations to grow but on the other hand the same businesses are routinely criticized for having a "more, more, more" mentality.,

I look at trickle-up as very, very short sighted. You can put a few hundred extra dollars in a guy's pocket & it'll be spread around a little but when it's gone it's gone. On the other hand, if a business creates a single job the ripple effect is broader (more money in one's pocket) and lasts longer (the worker gets the trickle up bonus every week in his paycheck). Plus, the stimulus bonus is false money- it has to come from someplace, isn't sustainable and has to be paid back.

 

I know we live in totally different economic circles but if you don't see the massive decrease in consumerism out there, we must live in different countries. It may be true that something like the financial sector is holding back for the reason you state but the manufacturing, tourism, retail and a host of other sectors are not going to hire or over-produce if the people aren't buying...no matter how much cash they have on hand or what Congress may do. And the people aren't going to be buying for a long time to come.

 

Okay, what country do you live in? US consumer spending has not seen a massive decrease like you claim. In fact, until May 2011, it had risen YOY for 20 straight months. It has not increased much mind you but the two factors keeping it flat are the price of gas and lack of jobs. Therefore, David is correct. If the corporations would reinvest their capital and start expanding their businesses again, they would create more jobs, and increase consumer spending. As it is, they are sitting on their profits waiting for 2012 and the end of Obama Presidency.

marketingcharts

 

Consumer Spending grew .1% overall last quarter. And fell .2% in the last month of the quarter (June). That is way down from historical averages. Not to mention consumer spending was weak in the first quarter of 2011 too. And consumer spending makes up somewhere around 70% of our economy. So that is a 2.2% annual rate in the first quarter and a 1.2% annual rate in the second quarter and a -2.4% annual rate in the last month of the quarter. Around 3.25% is the long term historical average annual rate.

And, even with the (artificially inflated) numbers of the last 2 years, I would not think smart businesses would be making long term plans on increased production capacity and expanded hiring based on the one time $800B Stimulus Plan and the 2 year $800B Tax Cut Extension (with a stimulus thrown in for good measure) Plan.

Those are the measures we have taken to increase consumer spending and boost the economy over the last 2 years and it is obvious they were not sustainable and were going to run out. One is gone now with no chance of being repeated and the other is very likely to be gone by the end of the Congressional budget process.

 

True, the Stimulus Bill was a short-term fix, but it got money into the economy faster than that same amount of money being put into big business (which may take years to filter through, and to who? The executives?). The bill was necessary to stave off a possible depression... like cleaning a wound before infection sets in. I'm not saying that by cleaning the wound we healed it, but it helped... and yeah, it's gonna leave a scar lol

As for the idea of a job being created, yeah... that would be a preferable, longer-lasting fix. Businesses create and shed jobs routinely, but I'd agree they are the ideal long-term solution.

 

I own three upscale homes in gated communities. Rent out two of them. Have lots of stock stuff. But with the way the world is moving I could see myself owning nothing just like that. Something has to be done for I didn't buy enough gold and the world can go into a nose dive any minute and at the end of that splat the only people who will come out ok would be the true rich, for they usually do. Don't believe it, look it up. The rich got richer during the great depresssion. I would be ok just living as is for my true wealth for me is my family but I want my kids to have something for I do not want them to be the bottom class in a two class system and that can happen if not already happening.

 

Andy, when enough people like you start thinking the way you are thinking then change will come. What will be interesting is what kind of change it will be. If we get nothing else out of this it might at least re-focus us on our families and our communities and on how no man is an island.

 

Wow, you should be a politician. You consider only slight growth in consumer spending a massive decrease. In addition, in your first post, you said it didn't matter what Congress does, so why even mention the stimulus.

 

Bottom line is the system is broken. The corporate has failed big time. Just taking care of the rich (hoping they'll be so kind as to invest in that which they strip) doesn't work. People are finally waking up to the failed system and everybody's grabbing what they can (what little there is left) and checking out of the corporate system. The rich are fine and will continue to be fine. They're rich. The corporate crapitalist way of raping and pilfering is coming to a head. I predict at least a 700 point drop in the market this week. Probably more on the order of 1000 is more likely. Another 1000 or so the week after.
The corporatist, wealthy blood suckers tried their way and lost. Rather than face that fact, they'd like to blame it all on Obama, and continue "business as usual". Sorry boys...it's over. Your system. Enjoy the crash and pretend it's all the liberals fault. Regardless...it's over. I only hope you blood suckers can suffer the calamity along with the lot of society you've extracted it from. If not you...hopefully your family will. You deserve it. I hope the Wall street profiteers get all they deserve in the next couple of weeks. Our fate is sealed. It would be nice to see theirs go bye bye as well.

 

The trend for 2011 is a massive decrease over historical norms and the number for the last month in the last quarter is a massive decrease period. A trend of 2.2% in the first quarter and 1.2% in the second quarter with -2.4% in the last month of the last quarter compared against a historical 80 year average of 3.25% in what amounts to 70% of our economy is going to affect business production and expansion plans. That is the reality of 2011.

And as far as Congress and Stimulus, any deficit stimulus and deficit tax cuts that Congress does matter very little except in the short term because they are not sustainable. They mostly just mask reality and prolong the inevitable. And if you plan on them in making your decisions for the future, whether a business or an individual, you would be unwise. A smart person wouldn't buy a house based upon them and a smart business wouldn't build a factory based upon them.

 

Class envy at it's worse, ladies & gentlemen!!

 

The real solution is to eat the rich as we all know.

 

Don't give tom any ideas, you know how he latches on to things without thinking.