Election 2010: Teabaggin' the Ds & Rs

[sebastian_dangerfield]

Originally Posted by Adder

Have you read Reich's Aftershock?

I disagree with his mantra that we need to have a middle class consuming to have a robust economy. The argument misses the issue at hand entirely. Those in positions of power don't give a fuck about the underlying economy. They want the best returns and they can do that without hiring people. They can do that putting money in emerging markets. And no, those markets don't need us as much as we think. As they grow, they self sustain in terms of consumption.

We get a two tiered USA: Those with capital employed abroad, and those fighting it out in the domestic economy. People like you and me are in the middle. I'm thrilled for my folks, who are happily enjoying market gains. Not so happy about the tax bill I know is coming because all the laid off people can't support the school being built down the road from me.

[sgtclub]

Originally Posted by Adder

You saw the numbers Cletus posted yesterday, right? That money will never be "paid back," at least not in a way that most people would think of that term. Instead, future benefits (at whatever, likely reduced levels) will be paid out of current tax receipts.

Which means people who paid won't "receive that money back" and their payroll taxes will have "gone to money heaven." But they will still get a cut out of the paycheck of those who are still working.

This is silly. Money is fungible. Essentially, borrowing from the SS trust fund then is essentially borrowing from the public now, because we will sell bonds now to pay the SS obligations.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

It's completely subjective. Which is to say, that when you say we "can't" raise taxes, we obviously can, but rich people wouldn't like it. (Also, a recession is a terrible time to do it.)

One smug reply deserves another, I guess.

Did you read what I said about taxing the rich not providing anywhere near the revenue needed to cover what we owe and have promised? What do you propose, a 90% bracket?

Say this with me: "If you tax them, they will leave." It is fact. It is already happening even without increases. Raise taxes all you like, revenue will remain near constant.

(And don't cite me old studies showing the converse. Money's moving a lot faster, and the emerging markets are a lot bigger and more business friendly than they were historically, and that trend is accelerating exponentially. Whatever you cite will be hoeplessly dated.)

[Penske 2.0]

Originally Posted by sebastian_dangerfield

One smug reply deserves another

New Board mottoe?

[Tyrone Slothrop]

Originally Posted by sebastian_dangerfield

One smug reply deserves another, I guess.

Did you read what I said about taxing the rich not providing anywhere near the revenue needed to cover what we owe and have promised? What do you propose, a 90% bracket?

Say this with me: "If you tax them, they will leave." It is fact. It is already happening even without increases. Raise taxes all you like, revenue will remain near constant.

(And don't cite me old studies showing the converse. Money's moving a lot faster, and the emerging markets are a lot bigger and more business friendly than they were historically, and that trend is accelerating exponentially. Whatever you cite will be hoeplessly dated.)

There is no doubt that raising taxes will dampen economic activity. But revenues won't remain constant. You're just making sh*t up for the sake of argument.

[Cletus Miller]

Originally Posted by Tyrone Slothrop

There is no doubt that raising taxes will dampen economic activity. But revenues won't remain constant. You're just making sh*t up for the sake of argument.

Yep. They might go up, they might go down, but there will be a statistically significant difference.

eta: Assuming that it's a increase that falls entirely on the "rich", rather than a VAT or payroll tax of some sort. Those would obviously generate additional revenue.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

There is no doubt that raising taxes will dampen economic activity. But revenues won't remain constant. You're just making sh*t up for the sake of argument.

I acknowledge my error. As Cletus noted, they may go down. I assume you assume they'll go up.

The movement will be minimal. The tax can never be implemented fast enough to beat the money running offshore or employing structures to avoid it.

[Greedy,Greedy,Greedy]

Originally Posted by sebastian_dangerfield

I disagree with his mantra that we need to have a middle class consuming to have a robust economy. The argument misses the issue at hand entirely. Those in positions of power don't give a fuck about the underlying economy. They want the best returns and they can do that without hiring people. They can do that putting money in emerging markets. And no, those markets don't need us as much as we think. As they grow, they self sustain in terms of consumption.

We get a two tiered USA: Those with capital employed abroad, and those fighting it out in the domestic economy. People like you and me are in the middle. I'm thrilled for my folks, who are happily enjoying market gains. Not so happy about the tax bill I know is coming because all the laid off people can't support the school being built down the road from me.

I haven't read the book, but it's Reich's schtick, and I'm pretty familiar with that.

Something that is critical that I think Reich generally underemphasizes that you pick up on here is really brought out well in those Hans Rosling videos if you have seen them. We do need consumers to have a robust economy, and traditionally the US middle class has been the biggest body of consumers anywhere in the world. But as the rest of the world catches up, especially India and China, there's just not as much incentive on the global stage for the US to keep it's big middle class. I think there are serious economic forces that would push the class separatiosn in both the US and India and China to move more toward each other - more stratified in the US, with more poverty, but with more wealth and a greater middle class in India and China. Yes, we need consumers, but they don't have to be here.

Kind of meta, but I see those tendencies every day in my work. And I don't think they're particularly good for us.

[sebastian_dangerfield]

Originally Posted by Cletus Miller

Yep. They might go up, they might go down, but there will be a statistically significant difference.

eta: Assuming that it's a increase that falls entirely on the "rich", rather than a VAT or payroll tax of some sort. Those would obviously generate additional revenue.

Statistically, not practically, significant.

[Penske 2.0]

Originally Posted by Greedy,Greedy,Greedy

I think there are serious economic forces that would push the class separatiosn in both the US and India and China to move more toward each other - more stratified in the US, with more poverty, but with more wealth and a greater middle class in India .

Jolly Vindaloo Day!

[Tyrone Slothrop]

Originally Posted by Cletus Miller

Yep. They might go up, they might go down, but there will be a statistically significant difference.

eta: Assuming that it's a increase that falls entirely on the "rich", rather than a VAT or payroll tax of some sort. Those would obviously generate additional revenue.

Do you really think that raising taxes would cause revenues to drop? I mean, really.

[sebastian_dangerfield]

Originally Posted by Greedy,Greedy,Greedy

I haven't read the book, but it's Reich's schtick, and I'm pretty familiar with that.

Something that is critical that I think Reich generally underemphasizes that you pick up on here is really brought out well in those Hans Rosling videos if you have seen them. We do need consumers to have a robust economy, and traditionally the US middle class has been the biggest body of consumers anywhere in the world. But as the rest of the world catches up, especially India and China, there's just not as much incentive on the global stage for the US to keep it's big middle class. I think there are serious economic forces that would push the class separatiosn in both the US and India and China to move more toward each other - more stratified in the US, with more poverty, but with more wealth and a greater middle class in India and China. Yes, we need consumers, but they don't have to be here.

Kind of meta, but I see those tendencies every day in my work. And I don't think they're particularly good for us.

I think Reich knows this, but doesn't want to raise it. Undoes his argument from an angle he doesn't deal with in the text.

You're dead right. And that's the kind of thing that gives policy wonks in DC who actually know what's going on night sweats. And if I might be cynical, I think that's what secretly drives many neocons and GOP stalwarts to push for/hope for things like war with Iran, etc. I think a lot of people feel we need some form of massive disruption to reassert dominance... set the emreging markets back a peg. I hope that's just a dark suspicion.

[Penske 2.0]

Originally Posted by Tyrone Slothrop

Do you really think that raising taxes would cause revenues to drop? I mean, really.

Yes; although revenues to tax accountants and offshore havens might go up.

[sebastian_dangerfield]

Originally Posted by Tyrone Slothrop

Do you really think that raising taxes would cause revenues to drop? I mean, really.

The argument against that proposition - "Clinton did it and it raised revenues!" - isn't applicable in an economy this globalized.

Speed of money v. speed of legislation. Not even a race. And the drop in activity in advance, based on mere fear of a raise in taxes, doubles the negative effect.

[Gattigap]

Originally Posted by sebastian_dangerfield

I think Reich knows this, but doesn't want to raise it. Undoes his argument from an angle he doesn't deal with in the text.

You're dead right. And that's the kind of thing that gives policy wonks in DC who actually know what's going on night sweats. And if I might be cynical, I think that's what secretly drives many neocons and GOP stalwarts to push for/hope for things like war with Iran, etc. I think a lot of people feel we need some form of massive disruption to reassert dominance... set the emreging markets back a peg. I hope that's just a dark suspicion.

I think the issue is an interesting one, but I don't attribute this kind of deep thinking to the neocons and GOP stalwarts (or to any hawkish Dems, for that matter.) After all, sometimes a dunderhead blathering on cable is simply a dunderhead.